Written evidence submitted by the Local Government Association [ASC 013]
1.1. The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross-party membership organisation, representing councils from England and Wales.
1.2. Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems
2.1. COVID-19 has put adult social care firmly in the public, political and media spotlight. This emergency has highlighted the essential value of social care to the wider public and this interest needs to be harnessed in the debate about the future of care and support. Long-term reform is urgently needed and we are calling on the Government to publish its proposals before the summer parliamentary recess.
2.2. Adult social care and support is a vital service in its own right. It helps people of all ages to live the life they want to lead. It binds our communities, helps sustain the NHS and provides essential economic value to our country. Too often health and social care are set on unequal footings, with the latter viewed (sometimes solely) in terms of the role it can play in supporting the former.
2.3. Social care requires urgent investment to help meet the continuing costs of COVID-19, particularly on the care workforce and unpaid carers, as well as investment to tackle the social care funding gap.
2.4. Our priorities for a new system of adult social care are: addressing unmet and under-met need by revisiting the existing model of eligibility; tackling workforce challenges by developing a new deal for the workforce; improving provision, choice and control by thinking about how the system can best be driven by people’s needs and experiences; improving quality by being clear on the outcomes we are collectively seeking to achieve and how performance against them is coordinated and supported, including the role of sector-led support; securing a more rational, sustainable and transparent funding model that is based on universal risk pooling; and finally, protecting people from facing catastrophic costs.
3.1. In thinking about the future, we first need to be clear about where we have come from and where we are now. Over the past decade, adult social care costs have risen by £8.5 billion, while total funding has grown by only £2.4 billion. This has left councils with a gap of £6.1 billion to fill. Of this, £4.1 billion has been met by making savings to adult social care services, whilst a further £2 billion has been diverted from other services, cutting them faster than otherwise would have been the case. In terms of the current picture, analysis before the 2020 Spending Review showed that adult social care faced a funding gap of £2.2 billion in 2021/22, rising to £2.7 billion in 2023/24. This is just for ‘core pressures’ (demography, inflation and National Living Wage increases) and the provider market gap (the difference between what providers say is the cost of delivering care and what councils pay). Assumptions are also made about the path of future funding (including council tax and core grant rising in line with inflation). The LGA will be publishing new analysis on the funding gap facing local government later this year.
3.2. The squeeze on council budgets has also resulted in some adult social care providers being in a perilous state. In analysis commissioned by the LGA ahead of the Comprehensive Spending Review in September 2020, the Institute for Fiscal Studies (IFS) estimated that the pressure on the provider market, resulting from councils paying less than a sustainable rate on commissioned services, is worth £1.34 billion on the basis of the most recent data available at that time. Over time, if unaddressed, this can grow to as high as £1.7 billion due to demand and inflation pressures. This is in line with our past analysis.
3.3. The COVID-19 pandemic has brought into sharp relief the challenges facing adult social care, many of which existed long before the pandemic and are a consequence of the funding picture outlined above. Of particular importance is the workforce crisis, which was one of the biggest issues facing the health and care system before the emergence of COVID-19. This has been exacerbated by the pandemic with staff working long hours under stressful conditions with limited mental health support. The full extent of workforce challenges caused by COVID-19 will not be known until the situation has stabilised. But we do know that a focus on staff wellbeing will be key as we move forward. Whilst resilience in the business sense is important to ensure adult social care providers can deliver the services so many people rely on, we also need to recognise that the adult social care workforce has been placed under immense pressure during the COVID-19 pandemic. We must now look at how we can make the workplace more supportive and ensure staff are not placed under undue stress and pressure.
3.4. The pandemic has also powerfully underlined the essential value of social care in helping people to live the lives they want to lead. The public, political and media spotlight that now shines on social care provides an important opportunity; a moment to grasp as we collectively seek to shape the future of care and support.
3.5. In thinking about the future of care and support, and the learning from the pandemic that needs to be applied, we developed the following seven principles for social care reform. These were published in July 2020, and more than thirty prominent national organisations from across care and health, including organisations representing people with lived experience, acted as signatories to them.
3.5.1. The first principle is people first and the value of social care. Whatever emerges post-COVID-19 should be rooted in, and guided by, what works for people, not what works for systems or structures. People with lived experience should be consulted on future reforms.
3.5.2. The second principle is the importance of ‘local’. The Government should actively promote the ‘principle of subsidiarity’ as a necessary underpinning feature of effective health, care and wellbeing and consider how that can most powerfully be brought to life.
3.5.3. The third principle is funding. Additional social care funding should be used to help us move to a more person-centred and preventative model of social care. It also needs to meet additional demands arising from COVID-19, plus pre-existing pressures.
3.5.4. Fourth, is workforce and the need for a new deal for the care workforce, comprising action on pay, training and development, career progression and professionalisation, and recognition.
3.5.5. Fifth is providers and commissioning, and the need to work with people with lived experience, including unpaid carers. Councils and providers should consider the incentives and barriers to creating more person-centred services that help prevent, delay or reduce the need for more formal care services.
3.5.6. Sixth, is health and integration. Health and social care are equally important. To signal and secure greater parity of esteem, the Government should create a ‘duty to cooperate’ requiring STPs and ICSs to engage with health and wellbeing boards as part of developing local plans to reshape and integrate health and care services.
3.5.7. Finally, seventh is care and support reform. Protecting a person from having to sell their home to pay for care is certainly one element of the ‘fairness debate’ at the heart of the question about long-term reform. But it is not the only one. The scope of and ambition for social care reform must be far greater, support adults of all ages including unpaid carers, and have at its heart a commitment to the Care Act wellbeing principle and improving people’s choice and control of the care and support they use to live their best life.
3.6. It is clear we need a ‘1948 moment’ for social care; a moment where we collectively aspire to something bigger and better for social care, because we aspire to something bigger and better for us all. Delivering such a moment cannot happen instantly. We therefore support calls for a long-term plan for social care, equivalent to that for the NHS. The immediate priorities must be:
3.6.1. investment to help meet the continuing costs of COVID-19 on social care, particularly on the care workforce and unpaid carers
3.6.2. investment to tackle the social care funding gap.
3.7. This funding should help begin the process of moving to a new system of social care, in which the priorities must be:
3.7.1. addressing unmet and under-met need by revisiting the existing model of eligibility
3.7.2. tackling workforce challenges by developing a new deal for the workforce
3.7.3. improving provision, choice and control by thinking about how the system can best be driven by people’s needs and experiences
3.7.4. improving quality by being clear on the outcomes we are collectively seeking to achieve and how performance against them is coordinated and supported, including the role of sector-led support
3.7.5. securing a more rational, sustainable and transparent funding model that is based on universal risk pooling
3.7.6. protecting people from facing catastrophic costs.
3.8. Given the above context, priorities and prioritisation, it is disappointing that the Government’s immediate priority for social care is to strengthen national oversight of care and support, rather than bring forward its long-awaited wider funding reforms to support people of all ages to live the life they want to lead. Our views on the White Paper’s proposals are set out in more detail in our website.
3.9. More broadly, when thinking about the need to reform adult social care, it is important to see the health, public health and social care landscape in the round with a focus on integrated place-based approaches supported by effective and equal system level partnerships. One thing that marked England out as COVID-19 hit was our poor public health including our high rates of inequalities, of smoking, and of overweight people and obesity. Councils have seen a £700 million real terms reduction in funding between 2014/15 and 2020/21 – a fall of almost a quarter (23.5 per cent) per person. Public health services run by councils have more than proven their worth through the pandemic. One of the lessons from this pandemic should be that public health services need to be adequately resourced.
4.1. We have previously recommended that the Government should make the case for increases in Income Tax and/or National Insurance and/or a social care premium/insurance scheme. This remains our position. We have been equally clear that the piecemeal and incremental approach to funding adult social care in recent years, including the reliance on the council tax precept, is unhelpful, unsustainable, and significantly impairs councils’ ability to plan beyond even the shortest of horizons.
4.2. We believe any funding model in consideration needs to pass certain tests articulated through the following questions:
4.2.1. Simplicity: is the proposed system clear and easy to understand?
4.2.2. Transparency: are the costs of care, the raising of funding for those costs and the spending of that funding clear and transparent?
4.2.3. Risk pooling: do the proposals pool financial risk among the population at large rather than costs being borne solely by individuals requiring care and support?
4.2.4. Certainty and sustainability: do the proposals raise money for the short, medium- and long-term?
4.2.5. Fairness: are the proposals likely to be considered fairer than current arrangements by the public (across a range of dimensions, such as for people who have saved all their lives, protecting housing assets, fairness between generations or fairness in terms of people’s ability to pay)?
4.2.6. Social contract: would the proposals give the public a clear sense of rights and responsibilities? For example, would the public have a clear sense that, by contributing financially through taxes, charges or other measures, the return would be guaranteed access to services on clear, understood and fair terms?
4.3. Risk pooling is particularly important. One of the most fundamental problems of the current funding model for social care, is that the risk of needing care and support – and therefore its cost – is not pooled. Instead, risk and cost fall solely on people with care needs. Some people within this group, which is small in relation to the adult population as a whole, may be required to contribute to the cost of their care in line with the financial means test, the existence of which for many people comes as a surprise. Some may end up paying nothing or very little, but others can end up having to pay significant amounts.
4.4. It is the opposite in the NHS where support is often described as being provided ‘free at the point of delivery, free at the point of need’. But, of course, such support through the NHS is not free because, as a society, we collectively share the risk of the cost of meeting health needs through taxation. Social care needs an equivalent risk pooling mechanism; a sharing of the burden amongst the whole population (on a means-tested basis for a degree of progressivity) to ensure nobody faces catastrophic costs, in which the definition of ‘catastrophic’ necessarily varies according to each person’s starting level of assets.
5.1. Stability in the sector can only be achieved if we recognise the underlying causes of the current instability. It is important to examine the actions and decisions that, over time, have led to the current situation.
Impact of current funding arrangements and benefits of a long-term settlement
5.2. Councils receive a funding settlement that covers one year (however, this often sits within a multi-year Spending Review framework) and are legally required to set a balanced budget every year. In recent years, funding has been at a level that creates significant budget pressure. Although councils have sought to protect adult social care relative to their other services during this period, social care has continued to face significant pressures. As above, one consequence of this pressure is councils’ difficulty in paying providers a fee rate that fully covers what providers say is the true cost of care and the growth of the ‘provider market gap’. As the National Audit Office say in their recent report on care markets, “most local authorities pay care providers below a sustainable rate.” This embeds an unwanted and unhelpful short-termism into the sector: councils’ contracts inevitably have to reflect the short-term nature of funding settlements; and providers’ arrangements inevitably have to reflect the short-term nature of funding certainty, with associated consequences for pay and the use of zero hours contracts. The absence of long-term and sustainable funding can also lead to people who pay for their own care being charged significantly more, in order to help providers balance their books. This ‘self-funder cross-subsidy’, a consequence of years of underfunding, is one of the many dimensions of ‘fairness’ at the heart of the debate about care reform.
5.3. Councils will typically commission at least 50 per cent of the social care in any area and many local providers will be dependent on funding received from councils, so the actions and approach of a council will influence the behaviour of most providers across the country. The absence of any medium or long-term commitment around funding makes it extremely difficult for local authorities to deliver cost-effective commissioning approaches which support future sustainability. This short-termism also reduces the possibility of long-term investment in areas such as use of technology or in service re-design, for which there may be a 3-5-year payback period.
5.4. Even before the pandemic, adult social care was under significant financial pressure. The 2019 ADASS budget survey showed that 75 per cent of councils (up from 66 per cent in 2018), reported that providers in their area had closed, ceased trading or handed back publicly-funded contracts in the last six months, affecting nearly 12,000 people. Provider organisations have also been expressing concerns about the viability of many of their members. COVID-19 has exacerbated these pressures facing providers, particularly in care homes as occupancy rates fall. For instance, an August 2020 survey of 256 care homes by the National Care Association revealed occupancy levels of 81 per cent; this compares with 92 per cent in June last year. Further, research by Knight Frank suggests it is the smaller independent care homes (namely, the 6,500 care homes with 40 or fewer beds) that are most at risk as they do not have the scale of larger operators to deal with reduced occupancy levels. Many smaller and sometimes less resilient providers offer the bespoke community-based support that government policy encourages because of the better outcomes it delivers for people.
5.5. Sustainable and long-term funding is also important for encouraging the growth we want to see in supported housing for older people and people of working age. Currently, housing associations can be deterred from delivering housing for people who need support because of the funding challenges outlined above.
Impact of current structural and cultural arrangements on the sector and benefits of change
5.6. The way in which health and social care are separately structured and funded creates instability within the social care sector. Health will typically pay higher rates than social care for the same service and so shortages will affect social care the most. Staff recruitment and retention has been an area of significant concern within the sector for some time. Parity with the NHS, on issues such as pay and career development, is of particular concern within nursing care. An integrated workforce strategy is required to reduce the competition for roles across the NHS and social care, identify and develop career pathways, address workforce parity with the NHS, improve terms and conditions and raise the profile of the care sector.
5.7. Similarly, structural change should also address how social care is perceived. For instance, it is well established that most people wish to remain living in their own home for longer, but this is not reflected in the national narrative around social care. Nor is it reflected in practical measures such as the Infection Control Fund, which stipulated that 75 to 80 per cent of the funds had to be spent supporting care homes, which was not consistent with the impact of the pandemic on social care providers or the proportion of council budgets spent on care homes (which is much less than 75 per cent). Models of care are changing. There is less reliance upon ‘institutional care’ in favour of ‘home first’ and this will require significant capital investment to ensure we have the community assets, appropriate housing stock, assistive technology, community equipment, aids, adaptations and new digital platforms that we will need.
Ability to deal with shocks and challenges
5.8. The factors set out above have created a social care sector run on very tight margins. This restricts the ability of councils and providers to deal with financial shocks, such as the significant and immediate increase in PPE costs seen at the start of the pandemic. This leaves the sector vulnerable to the impacts of specific issues that a more stable, and better funded, sector could deal with. The tight financial margins also lead to the level of care and support services provided in an area being very close to the level required. Any over-provision or spare capacity that incurs a cost but does not generate an income (such as an empty care home bed) will affect provider’s financial viability. This means that when a provider closes or leaves the sector, as will happen for a variety of reasons, there will be few suitable alternatives.
Intelligence and information
5.9. Over the last 12 months councils have made significant improvements in their access and use of information and intelligence. This has been particularly helpful in supporting councils to assess, understand and manage risks to care provider viability.
5.10. The biggest ‘intelligence’ challenges councils face are in relation to the large number of people that arrange and fund their own care and support and in identifying providers that predominantly deliver care to this group. Councils currently have limited knowledge of who these people are or what their care needs are, yet councils will become responsible for their care and support once they deplete their assets below the financial means test threshold. This can happen sooner than need be the case, hence the importance of timely financial information and advice.
5.11. We have seen over the last 12 months the benefits of councils and all other partners having the right information and intelligence. Data requirements are duplicated at a local, regional, and national level, there is currently no nationally agreed data set in use for monitoring markets or common diagnostic tools for identifying risk. A strategy is required to create a common and easily accessible data set, linking to wealth of data collected across agencies, for example CQC’s market oversight regime.
5.12. Many councils and regions have developed and implemented market intelligence approaches over the last 12 months that have supported market oversight and stability. The LGA commissioned an external organisation to develop a tool with Liverpool City Region and Yorkshire and Humber region that helps them establish the current and future viability of each care home in their area. This looks at current occupancy, fee rates paid and length of stay of residents and has been used to inform support for the sector, funding decisions and strategic commissioning plans around market development.
5.13. Councils, supported by the LGA, are uniquely placed to help bring about further improvements in adult social care. We have the relationships – both locally and nationally – with partners across health, housing, the voluntary and community sector (VCS) and providers, that are required to drive social care forward and deliver the changes we all know are needed. When councils have been funded to do things, such as commission additional services and implement rapid discharge arrangements to free up beds for COVID-19 patients, they have delivered.
6.1. Social care is a service based largely on interactions and relationships between people. Any successful efforts to embed quality and innovation must be based on reducing the need to compete largely on price and increasing the focus on compassionate interaction. To do this, staff will need greater skills and a chance to develop in a professional framework. Social care should not be a “minimum wage industry”, subject to a damaging turnover of staff in casual employment.
6.2. Addressing the recruitment and retention problems in the adult social care sector will be essential if we are to make improvements on quality and innovation. The on-going recruitment and retention problems in adult social care are highlighted in high vacancy and turnover rates that affect service quality. In addition, many staff have uncertain incomes because of the prevalence of zero-hours contracts. The temporary shifts in these patterns due to COVID-19 have highlighted the need to deal with them permanently.
6.3. A recent Skills for Care report on ‘the state of the social care market’ found:
6.3.1. Pay in adult social care is on average 25 per cent lower than pay in the NHS.
6.3.2. The adult social care sector in England still needs to fill around 112,000 job vacancies on any given day.
6.3.3. The staff turnover rate of directly employed staff working in the adult social care sector was 30.4 per cent in 2019/20.
6.4. The ability to attract and retain staff with the highest skills sets is hampered by poor perceptions of pay and reward and the lack of coherent career structures that allow people to think beyond temporary work in social care. Better pay and reward needs to form part of a package of reforms to transform the sector as set out for example in the recent strategic workforce framework by the LGA, ADASS and Skills for Care. Increased investment in training and development, the use of technology and a focus on the wellbeing of staff will all help to drive improved productivity across the sector alongside improved pay and conditions.
6.5. The social care workforce must be developed in a manner equivalent to the NHS as part of a stable, sustainable solution to long-term funding problems and that this must involve “parity of esteem” for social care staff with their NHS colleagues. Any changes to pay and reward must be fully funded by central Government as there is no resource in the sector to meet the demands of this challenge.
6.6. The Government should establish an independent process to gather evidence and make recommendations on the level and future determination of social care pay as soon as possible so that planning can begin. The transformation of pay and reward is a complex medium to long-term proposition and will require considerable investment. Moreover, there will be a variety of opinions on the best way to take things forward. An independent process provides the best opportunity to achieve a consensus on outcomes. Other terms and conditions should be looked at as soon as possible.
6.7. It is vital that we think and talk about adult social care as an economic opportunity rather an economic cost. Reforming pay and reward for those working in adult social care pay will attract people to work in the sector, fill existing vacancies and ultimately benefit local economies. The overall economic contribution of adult social care is considerable, as estimates produced for Skills for care and the LGA show. At the time of the report, adult social care contributed £46.2 billion to the economy on an annual basis and supported 603,000 jobs through indirect spending as well as the 1,200,000 employed directly in the sector. Adult social care can play an important role in supporting the country and the economy as we seek to recover from the effects of the pandemic.
6.8. Despite these challenges, a lot of work is already happening to improve quality and drive innovation. It is common for councils to use quality as a key factor when deciding which provider will be asked to support an individual. In this case, ‘quality’ may relate to the ability of that provider to meet a particular person’s specific needs and preferences, or it may relate to an assessment of the providers overall quality, such as their CQC rating. Councils may also pay providers higher rates where their staff have a higher level of training (such as in delivering dementia care) and therefore are able to deliver a better quality of service.
6.9. Councils will also work with providers to explore the use of technology or other innovative developments in the provision of care and support. In such cases, the council and providers will enter into funding agreements that work for them and what they are trying to achieve.
6.10. A key area where a system wide approach could add value is in relation to the provision of wider support for people’s health and wellbeing. With greater integration between health and social care and more flexible funding, care providers could be incentivised to provide a broader range of care and support to people. As an example, where a care provider supports an individual at home, that provider could be incentivised to support the person in other ways that help the person’s health and wellbeing. This may relate to social interaction or the provision of low-level health services that would otherwise have to be done through a visit to a GP or hospital. This is a good example of where joined up thinking about health and social care will lead to a more effective health and social care system and quality of life.
6.11. With technology and innovation, the approach councils will take is more likely to be one of joint development. One council in the West Midlands has supported local nursing and residential care providers during COVID-19 with technology adoption. Following engagement with providers about technology needs, the council has purchased sim-enabled tablet devices for homes with poor or no broadband. The council has been working in partnership with My Improvement Network to deploy the devices and this includes remote onboarding, training and technical support if required.
6.12. All the examples set out above happen despite the instability in the sector. The best way to ‘incentivise’ the type of development and changes we all want to see is to create the underlying conditions that encourage and support these improvements. If the social care sector was more stable and if councils and providers had greater long-term funding commitment, they would be better able to invest in long-term development and innovative ways of working. This would be more effective than any short-term innovation fund.
April 2021