The King’s Fund is an independent charitable organisation working to improve health and care in England. Our vision is that the best possible health and care is available to all. Over recent years we have undertaken and commissioned extensive research into how adult social care could be sustainably funded, how additional revenue could be raised and how to make access to social care fairer and more equitable.
As it is, the social care system is not fit for purpose and is failing the people who rely on it, with high levels of unmet need and providers struggling to deliver the quality of care that older and disabled people have a right to expect (Bottery and Babalola 2020). These combine to place great pressures on families and carers. The Covid-19 epidemic has exacerbated many of these problems (Bottery 2020), including increasing levels of unmet need and further destabilised the already fragile care provider market.
The evidence we present here sets out our analysis of the problem the opportunities and our thinking about how to solve it.
In 2019 we set out the key problems that the Prime Minister’s planned reform of social care must address (Bottery 2019). The issues we identified were unfairness in means testing, risk of catastrophic costs for individuals, unmet need, quality of care, workforce pay and conditions, market fragility, disjointed care, and variation in access and performance. Covid-19 has exacerbated many of these, highlighting the need for reform and making action all the more urgent (Bottery 2020).
• Quality of care: Covid-19 has had a devastating impact on quality of care, and deaths in care settings have occurred at a scale that would have been unthinkable before the pandemic (ONS 2020). As well as the impact on families who have lost loved ones, the emotional toll of this on staff in care homes, some of whom lost several residents in a matter of days, has been immense. There are serious questions about the preparedness and resilience of the sector for the epidemic and for future risks (IfG 2020).
• Unmet need: Covid-19 will also have affected the level of unmet need for social care, though the picture is a complicated one, with the pandemic both increasing need but also helping to identify it. Just under half of directors of adult social services have said they believe there has been an increase in unmet need since March 2020 (ADASS 2020).
Unmet need will also have risen as people have been more reluctant to ask for support during the pandemic. Local authorities have reported people declining care because of concerns about admitting care workers into their homes (ADASS 2020). The Care Quality Commission (CQC) found that admissions to care homes fell by more than a quarter among publicly funded clients and by two-thirds among self-funders during the first wave of the pandemic. Use of home care also fell, though the CQC reports it recovering to 94 per cent of pre-Covid levels by July (CQC 2020).
It is also likely that many people did not even ask for support for the same reasons they did not go to accident and emergency – reluctance to use services and, perhaps, concern about adding to the huge existing pressure on the system.
All of this will have increased the demands on unpaid family carers and created many more of them – Carers UK estimates there are 4.5 million people new to caring since the start of the pandemic, 2.8 million of whom are juggling work and care (Carers UK 2020).
• Unwarranted variations in access and performance: Before the Covid-19 pandemic, there was already significant local variation in access to care and service provision. Much of this variation is unexplained and unwarranted, while some reflects differences in demographics or strategic policy decisions by local authorities. There was also a wide variation in the reported experience of local authorities in the early stages of Covid-19. For example, while most directors of adult social services reported an increase in referrals from the community, a third saw a fall in demand of up to 10 per cent (ADASS 2020).
It is possible that the extraordinary circumstances of Covid-19 will have increased rather than reduced the differences between local authorities, as they decided how best to respond. Only eight took up the formal powers to ‘ease’ their formal Care Act 2014 duties, thereby allowing them, for example, to cease formal assessments (Department of Health and Social Care 2020).
• Workforce pay and conditions: Covid-19 highlighted the inadequate workforce pay and conditions experienced by social care staff, and polling suggests that increased awareness has led to increased support for pay increases for care workers (Fawcett Society 2020). Though it has not as yet brought any improvement in them. However, there are small positive signs the government seems now to accept the need to tackle some of these issues having launched a national recruitment campaign, set out new practical support for registered managers and established a new workforce capacity fund (Skills for Care undated; Department for Health and Social Care 2021). There have been efforts to provide central training support. However, these are all tentative steps, rather than the giant stride forward the sector needs.
• Market fragility: Covid-19 has shaken the market, especially for residential care, and seems certain to result in the loss of some providers. While councils were awarded £3 billion to manage Covid-19 pressures, as well as a potential extra £1 billion in social care funding made up of grants and increased Council Tax precept levy, the provider market is still struggling (Anandaciva 2020). A Local Government Association report estimates total extra costs to care providers of more than £6 billion for extra staffing, cleaning and personal protective equipment (PPE), at a time when there is less demand (and therefore revenue) (LGA 2020). Care homes in particular are struggling with lower occupancy as a result of deaths and reduced demand. A survey of care homes by the National Care Association, which represents smaller and medium-sized homes, found average occupancy at 81 per cent compared to 92 per cent at the same time in 2019 (NCA 2020).
• Disjointed care: On one level, the initial response to Covid-19 alleviated one of the issues around disjointed care that had bedevilled the sector, delayed transfers of care. Yet the response has proved enormously controversial, with debate around the extent to which the practice of discharging patients into care homes without testing them for Covid-19 contributed to the infection and death rate in those homes during the first wave of the pandemic (PAC 2020).
There is also concern about whether people were always discharged to the right place for their longer-term health and wellbeing (ADASS 2020).
The extent to which social care deals with these problems and how they continue to will depend on a range of factors, most obviously and inevitably, the level of funding provided to support the sector and whether this is sufficient to deal with the demands created by Covid-19.
There are two different but connected questions about funding for adult social care. The first relates to providing sufficient funding for the current means-testing system so that care needs can be met, providers paid a fair price for care and the workforce rewarded appropriately. In recent years, the government has tended to allow local government to meet these costs through increases to Council Tax locally. As there is not close alignment between need for social care and the ability to raise revenue locally (IFS 2018), the balance between national and local funds has now tipped too far, and it will be important that national sources of funding are found to support the existing social care system. As this is an existing public service, this should be managed during the normal HM Treasury fiscal and Spending Review processes.
The second question relates to how to fund an improved social care offer that supports more people with their care needs. Two principles should be at the heart of a new funding offer.
In 2014, The King’s Fund’s Barker Commission set out a range of options for funding an improved, fairer adult social care system (Commission on the Future of Health and Social Care in England 2014).
The range of options to reform funding and charging for social care is broad. A successful approach to reform that would deliver a system that better meets people’s care and support needs should involve widening access by making existing eligibility criteria more generous, introducing a cap on the costs of care and improving the preventive support offer.
The issue of market instability in social care has been with us for some time. Entry and exit from a market is not in and of itself a sign of instability (it’s a sign of a market that is replacing poor provision/service), but over recent years we have seen more exit from the market to the stage where there is overall fragility in the sector and issues with capacity in some areas. The problem has two separate but related causes. First, local authorities have limited how much they pay for services at the same time as providers have faced increasing costs. This has led to provider failure and refusal of contracts. Second, some providers are choosing to focus on self-funder markets, where buyers will pay more for care. Both factors lead to supply problems.
Provider failure is one of the most visible signs of market instability, though the problems with the social care market run much deeper. Working with the Health Foundation, The King’s Fund is looking at options to address other aspects of market failure, which include low levels of public understanding of how the system works, problems with care quality, a failure to scale up successful services, high workforce turnover rates and additional pressure on the NHS and family carers (Bottery et al 2021).
Stabilisation of the adult social care market will require a combination of at least three policy actions.
• Provider fee rates increases: If local authorities paid providers an appropriate amount for care that better meets the cost of delivering care, it should help improve quality and, at least in theory, mean better pay for staff, which would in turn reduce workforce pressures (Bottery 2019). However, the National Audit Office (2021) found that local authorities pay below the sustainable rate for residential care for older people and home care. Appropriate fee levels should also allow for return on investment for much needed capital improvements to be made. Providers that have focused purely on self-funders might also return to publicly funded care, thereby increasing capacity. This would require a significant cash injection.
• More effective ‘market shaping’: Local authorities have a duty under the Care Act 2014 to ‘shape the market’ for care provision in their area. In practice, few have taken this role as broadly as it was intended (NAO 2021). However, they could take a more active role to support and develop local care providers, commission with broader ‘social value’ objectives and sometimes step in to provide services where the market cannot. This would require additional support, oversight and investment.
• Strengthening oversight: The CQC currently regulates care providers for quality and has a market oversight role that includes reviewing the financial resilience of the largest and most difficult to replace providers. We support the current health and care White Paper proposals for CQC to assess how effectively local authorities are discharging their social care duties, including those around market shaping as well as broader duties around commissioning and personalisation (McKenna 2021; NAO 2021).
The first stage in a market being able to compete on quality and innovation is that there must be enough capacity/quantity for choice to be meaningful for consumers. This would point to the need for wider reform to consider provider instability, workforce vacancy and turnover rates.
Beyond this, there are parts of normal markets that work less well for social care at the current time. These market failures are part of our joint work with The Health Foundation, which we will be taking forward work this year, to investigate issues like this and bring forward recommendations (Bottery et al 2021). For example, some of the areas to consider improvements are:
These issues will need to be addressed both where people and their families are direct consumers of care, and where local authority commissioners are arranging care on behalf of people, where commissioning and procurement processes need to support this.
Separately, direct payments in social care have been seen as a way to allow adults more choice and control over the care they receive and they have helped develop a market for personal assistants, which many working-age adults in particular find transformational. However, they have had less impact in improving quality and innovation in other areas and take up among older people in particular is still low. This may be because of issues with support and implementation: service-user groups say some local authorities offer far more support than others and some are also more prescriptive than others about what they may be spent on (PAC 2016).
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Association of Directors of Adult Social Services (2020). ADASS budget survey 2020 – Covid-19 response [online]. ADASS website. Available at: www.adass.org.uk/adass-budget-survey-2020-part-one-covid-19-response (accessed on 12 April 2021).
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