Written evidence submitted by the County Councils Network [ASC 049]

 

 

SUMMARY

 

 

 

 

 

 

 

 


INTRODUCTION

 

  1. The County Councils Network (CCN) represents 37 English local authorities that serve counties. CCN’s membership includes both county council and unitary authorities who together have over 2,500 councillors and serve over 26m people (47% of the population) across 86% of England and deliver high-quality services that matter the most to local communities, including adult social care and public health.

 

  1. CCN is acutely concerned that adult social care is moved to a long-term sustainable funding solution as soon as possible.  County authorities face particular challenges of more rapidly ageing demographics placing more pressure on these services.  Furthermore, in CCN’s 24 two-tier member authorities, the division of functions across districts and boroughs means spending on adult social care makes up a greater proportion of a county’s overall budgets.

 

  1. CCN are pleased to submit written evidence to the committee and would welcome the opportunity to provide oral evidence to this inquiry.

 

CCN & Newton Report: The Future Of Social Care

 

  1. The debate around adult social care is now set to enter a new and pivotally important phase. Whilst the financial and service pressures on the system have begun to reach breaking point, which CCN has warned about for years, the additional impact of Covid-19 on adult social care and the associated market system of delivery has meant this area of policy has a higher profile within the public sphere than ever before.  The Government has reaffirmed its intent to set out new proposals for reform this year, and with publication of the Health and Care White Paper in February 2021, which contains significant implications for the context in which reform will be delivered, these proposals are urgently needed.

 

  1. As such CCN has published extensively on this issue for many years.  In September 2020 the ‘thought leadership’ piece The Other Side Of The Coin set out CCN’s key principles for adult social care reform grouped around four key themes of Scope; Infrastructure; Resourcing and Improvement.[1]

 

  1. This paper provided a starting point for the development of the in-depth report The Future of Social Care[2] published in February 2021.  This large-scale study was produced by CCN and Association County Chief Executives (ACCE) working with the sector expertise of Newton Europe.  It draws on extensive consultation and engagement with key stakeholders to present a comprehensive ‘optimised model’ for how ASC can be delivered by local authorities at high quality and with maximum efficiency, if Government shows faith in local government by raising and providing sufficient and consistent funding.  A more detailed summary of the report can be found in Appendix A.

 

  1. CCN recognizes that although more financial investment is needed in the sector, there also needs to be wholesale reform of the system.  The report is intended to provide a comprehensive evidence base for central government setting out an optimised model that can be delivered with a sustainable funding settlement.  Such a model would deliver improved outcomes for individuals and the study also outlines how it would also provide as much as £1.6bn in financial benefits every year by reducing care costs – in particular through preventing the need for more intensive forms of care.

 

Social Care Funding – the pre-Covid picture

 

  1. Whilst the government’s reform plans remain unpublished the principal concern of county authorities is the uncertainty of funding of adult social care.  Ahead of the Covid pandemic, independent research by PricewaterhouseCoopers (PwC), commissioned by CCN and published in May 2019, projected that councils will need to spend £6.1bn per year more in 2025 on adult social care services compared to what they were spending a decade previously.[3] Importantly, this cost just keeps services ‘standing still’ as they presently are, rather than improving or enhancing them nor increasing access to services for a wider cohort of service users.

 

  1. Whilst PwC’s figures look at change in spending over a decade, the analysis shows that it would be over the next six years (2019-25) that local authorities will face the most pressure. Councils will be having to spend £3.9bn more a year in 2025 compared to how much they are spending currently in 2019.[4]

 

  1. England’s 37 county authorities were responsible for £2.9bn of the £6.1bn figure – just under half of the total of all 152 social care authorities. PwC concludes that those large, often rural, county authorities are the most exposed to financial pressures yet have the least ability to address these pressures. They will be spending £2.1bn more in 2025 compared to what they were spending when the research was published in 2019[5] – driven by a range of factors including overall budget reductions, populations ageing more rapidly than cities, and specific additional cost pressures such as the need to deliver services across wider geographical areas.

 

  1. In autumn 2019 a further report with LG Futures from CCN demonstrated the extent of specific funding for social care since 2015/16, including temporary funding, that has been allocated to councils. [6]

 

  1. Our analysis also showed how during the latter part of the previous decade there was a significant shift towards temporary grant funding for adult social care.  Between 2015/16 and 2019/20 Formula Funding for adult social care across England was reduced by 29%, and 36.3% for CCN member authorities.  However, once the value of temporary grant funding such as Better Care Fund (iBCF); the Adult and Social Support Care Grant (ASSCG); and the Winter Pressures Grant (WPG) was included then in England there was a small rise of 0.85% in total funding, and the CCN reduction was reduced to just 5.1%.[7]  These figures do not of course take into account the effect of inflation.

 

  1. Despite this, using this research and PwC’s spending need estimates, CCN set out in its 2020 Spending Review submission the extent at which government funding had contributed towards meeting council costs between 2015/16 and 2019/20. It also projected forward over the coming five years, incorporating government’s manifesto commitment to provide an additional £1bn in social care funding, up 2024/25.

 

  1. Taking the two periods analysed above together, the graph below shows the change in spending need and total grant funding (including temporary grants) for the period 2015/16 to 2024/25. Due to rising demand for services outpacing the additional funding for ASC over the 10-year period, increased funding will only meet 49% of the increased costs of providing services in CCN member councils, and 64% nationally.

 

Fig.1: Change in funding 2015/16 -2024/25 compared to change in spending need

 

 

  1. Moreover, despite the increase in funding, government funding as a percentage of overall costs will only be marginally higher in 2024/25 compared to 2015/16. Nationally, 53% of costs will be covered by government grants, with only 41% of costs being met in CCN member council areas.

 

Fig.2: Total Government grant as a % of spending need

 

Type of local authority

2015/16

2020/21

2024/25

CCN

37%

33%

41%

Unitary (non CCN)

52%

48%

56%

Met District

63%

62%

72%

London

57%

54%

61%

England

48%

45%

53%

 

  1. One other policy intervention by Government has been the introduction of the Adult Social Care Precept.  Up to 2019/20, this has allowed upper-tier councils to levy an additional 2% of council tax per year (capped at a 6% rise over a three-year period) to specifically fund ASC services in England. In 2020/21, the policy was extended for a further year.

 

  1. Table 17 shows that, even including the income raised from the precept by different local authority types,[8] only 53% of the costs of ASC for CCN member councils are being meet through government policy interventions, rising to 64% nationally.

 


Fig.3: Total Government grant as a % of spending need including ASC precept income

 

Type of local authority

2024/25

CCN

53%

Unitary (non CCN)

68%

Met district

81%

London

71%

England

64%

 

  1. The analysis demonstrates that the funding set out for ASC at the time of the last spending review up 2019/20 was insufficient to meet pre-existing shortfalls in funding, unmet needs and the rising costs of services. Measures by Government to provide one-off or temporary funding streams – which are often provided last minute with specific conditions – have simply served to counteract large cuts to core funding sources for ASC.

 

  1. The overall impact has been to shift a significant proportion of adult social care funding into temporary and piecemeal pots. This resulted in a situation where in 2020/21 temporary grants represented 54% of all direct government support for adult social care in CCN member councils and 59% nationally. The short-term nature of these grants has made it increasingly difficult for local authorities to be able to adequately plan services for the medium- to long-term.

 

  1. From 2020/21 onwards, although the existing commitment to increase social care funding over the course of this parliament will help to meet the rising costs of services, it will be insufficient to provide investment to improve services beyond current service levels or meet existing unmet needs within the system. Further reductions to efficiencies and reductions to service will be required for CCN member councils just to meet rising costs of services despite the resources provided by Government.

 

  1. Moreover, while government funded support as a percentage of overall costs has increased marginally by 2024/25, the introduction of the precept has further shifted the burden for paying for services on council taxpayers. While council tax will continue to play at role in funding services, the burden on local residents is unsustainable going forward.

 

  1. Below we address some of the questions specifically posed by this inquiry.

 

 

How has Covid-19 changed the landscape for long-term funding reform of the adult social care sector?

 

  1. Covid-19 has had a dramatic and well-documented impact on the adult social system, above and beyond that experienced by than any other public service bar the NHS.  Below are some examples of this impact which CCN’s member authorities have shared with us over the past year.

 

Adjustment to new pressures

 

  1. The Covid-19 pandemic has presented enormous challenges for the adult social care sector.  At the outset the focus on protecting the responsiveness of the acute health system led to Covid-positive patients being discharged from hospital. The initial response which allowed some discharges into care homes is believed to have contributed to some the most severe outbreaks of the pandemic amongst people most vulnerable to the disease. 

 

  1. There has been significant learning from this experience and it is now clear that health and social care need to be viewed as two equal and intertwined aspects of a public health response to a pandemic.  County authorities have responded to this challenge by using much of the emergency Covid funding for local government to invest in safe care for hospital discharge – such as the erection of a temporary care hospital for those recovering from Covid in Stoke Mandeville by Buckinghamshire Council.

 

  1. The allocation of Personal Protective Equipment to the adult social care sector in the early stages of the pandemic was severely compromised.  The impact on individual providers varied widely, mainly depending on how recently they had happened to have ordered new supplies in their procurement cycle before demand (and prices) rocketed.  County authorities received very limited supplies via their Local Resilience Forums to help mitigate this situation – a crucial strand for future funding of the sector will need to include holding adequate stocks of PPE locally to ensure that local authorities are able to secure additional supplies to support their local care markets in an emergency situation.

 

  1. Given this, we were pleased when the Government did pivot towards better safeguards to protect care homes from Covid outbreaks.  CCN welcomed the introduction of the Infection Control Fund which has specifically helped in this regard, and counties have worked hard to distribute this funding by working closely with providers to maximize its effectiveness within the strict criteria for its use.

 

  1. The impact of this period though is likely to lead to a long-term impact on the sector.  Firstly it has contributed to a disruption to local care markets and providers’ economic models not only by the immediate and traumatic loss of residents in many unfortunate to suffer tragic loss of life – but also by significantly shaking public trust in the whole residential care system.  Given the experience of Covid it is likely many families will opt to make alternative arrangements for their loved ones’ care and the market will need to react and adjust to accommodate new and changing needs – which may involve a greater demand for domiciliary care, and could also potentially lead to more people leaving the labour market to become full-time carers themselves, meaning different demands being made on benefits such as carers’ allowance.

 

Evolution of the social care market post-Covid

 

  1. It is far too early to make accurate predictions about how the post-Covid market for adult social care will evolve.  However, at this point it seems highly unlikely that the market which emerges in the wake of the pandemic will be reliant on residential care in the same way.  At present the central response to Covid has still been to provide money for local authorities to support providers with additional funding.  This has been of vital importance during the initial stages of Covid, but there is a recognition that the market will need to adjust to new conditions post-pandemic. 

 

  1. As in all market transitions, there are likely to be challenges for some providers but local authorities need the autonomy to use the emergency funding (such as the Infection Control Fund) to manage their care markets in a way that best suits local need, even if this may involve making tough choices of where to invest.  Even now, it is not clear whether continuing investment from emergency funding may be artificially preventing the collapse of some providers who will not survive in the medium to long term, particularly if the shift in the market is away from residential care to more home-based care solutions.

 

  1. County authorities are particularly concerned about a potential change in the profile of those needing care in years to come.  Whilst the tragic losses incurred by Covid may provide a small downward spike in demand from older people in the immediate and short-term, CCN member authorities this is likely to be more than offset by a sharp rise in younger working-age people needing more extensive care for reasons listed below:

 

 

 

 

  1. It is highly possible that a rise in demand for social care in the coming years will be set against a significant reduction in the income base of most local authorities.  This will not only be due to a predicted spike in unemployment, but also the potential decline of the high street as a business rate tax base for many councils.  County authorities are already looking at strategies to regenerate town centres as part of their recovery plans, but on present projections it is highly possible that there may be disruptions and shifts in the income base for many councils – for instance, where offices may be converted to flats post-Covid.  This may lead to heighten concerns around how far funding of adult social care can be reliant on business rates going forward – an issue which the committee has considered in past inquiries.

 

How should additional funds for the adult social care sector be raised?

 

  1. As shown above, over recent years the pressure on adult social care budgets has been alleviated partly by local authorities being offered the opportunity to raise additional revenue for this purpose by way of a ‘precept’ added to council tax and temporary funding.  Whilst this has helped to mitigate the immediate pressure on finding a national funding solution, it has still had the effect of creating an additional tax burden on citizens for adult social care while being insufficient to meet rising costs

 

  1. On embarking on the development of our The Future Of Social Care report, CCN determined that it is local government’s role to make credible and realistic representations for the funding envelope required to deliver the high quality social care system which its communities demand, based on our members’ knowledge and experience of delivering the existing system.  This is what led to our focus on an ‘optimised model’ to support such calculations by policy makers, ensuring too that its vision challenges local authorities as to where they can make delivery more efficient alongside calling for increased funding on an ‘invest to save’ basis.

 

  1. However, local government will not be in a position to raise revenues to cover the entire funding of the social care system itself without national taxation support from the centre. CCN recognises that this makes this a national policy issue and does not have a single solution it advocates for solving the social care crisis.  However, we do urge that additional funding will need to be sufficient to stabilise the existing system and specifically meet current ‘unmet’ need as a result of high eligibility thresholds, but also the additional financial burdens which may be created from a cap on care costs and a higher means test threshold.

 

  1. CCN remains a keen observer of this debate, analysing many of recent reports on this subject which have been put forward by high profile organisations such as the Centre for Policy Studies and Policy Exchange.  Most recently CCN provided support in the development of one such paper from Demos authored by Danny Kruger MP – The Care Commitment – which put forward further ideas in this space and which we hope has helped to re-stimulate this debate in the wake of Covid.[9]

 

How can the adult social care market be stabilised?

 

  1. Even before Covid there were significant challenges emerging in how to stabilise the adult social care market.  County authorities were already trying to encourage providers to shift away from their traditional model of delivery. 

 

  1. Reforms will need to provide sufficient funding to ensure that local care markets are sustainable. CCN’s work with LaingBuisson in 2015, and subsequent report in 2017[10], identified the unsustainable nature of county care markets. The budget reductions faced by local government since 2010 has meant that local authorities were ‘forced by constrained budgets to set annual fee uplifts below the level of cost inflation and as providers compensated by setting above inflation fee uplifts for private payers’. This had led to a care home fee gap of £670m for counties alone by the time of publication in 2017 which is believed to have further grown since. This is unsustainable and has led to the provider sector being left in a position whereby local authority contracts do not cover the costs of service provision, as a result some providers have handed contracts back to commissioners. It is imperative that county care markets are placed on a sustainable footing, or risk not having sufficient high-quality capacity available to meet needs and also to discharge patients from acute settings to.  The picture is likely to become significantly more pressing in the wake of COVID in the light of some of the additional pressures and market shifts which CCN has outlined earlier in this response.

 

Retirement Communities

 

  1. As indicated earlier the trend for older people’s care is likely to continue to move away from residential to home based domiciliary care.  This will raise significant issues in county authorities given the increased distances over which such services need to be delivered and this must be reflected in the funding which local authorities receive.

 

  1. Suitable housing will always be a key factor in the development of adult social care.  In its report Planning For Retirement, CCN and the Association of Retirement Community Operators highlighted the how many county authorities have begun to invest in Retirement Communities which can offer a more gradated and preventative approach to ageing within specifically designed housing with care developments.  This report noted that the proportion of older people in Retirement Communities in the UK is a tenth of that in similar countries such as the US, Australia and New Zealand.[11]

 

  1. However in two-tier county areas it can be more problematic to strategically plan retirement housing due to the adult social care and housing functions being split across separate organisations.  The report recommended that one problem is the large number of terms being used to describe ‘Retirement Communities’ (e.g. ‘Extra Care’, ‘Close Care’, ‘Later Living’ etc.) makes it confusing for different functions to be always be clear on what they are talking about to each other.  Creating more common language to define what a Retirement Community is and what it should offer would be helpful.

 

  1. Another recommendation would be to ensure that classifications in the planning system properly reflects the fact that the retirement community model is neither C2 (Residential Care) or C3 (Private Retirement Housing) but somewhere in-between.  The report therefore recommends the creation of a new C2R category with clear definitions of what would be expected from a Retirement Community which could provide greater assurance for councils, providers and developers alike and make the creation of such developments more likely.

 

Workforce

 

  1. A consistent issue which destabilises the adult social care sector is the transient nature of its workforce.  This is due to a variety of factors, but is largely underpinned by the low pay and low status of the workforce – particularly by comparison to those working in the health sector.  Whilst the government has attempted to draw attention to the important role of the care workforce to some extent during the pandemic, the reality is that most public narrative still ‘thanks’ the NHS without fully recognising the equally important contribution of care workers.

 

  1. The additional stress experienced by health workers has also been felt by those working in adult social care – particularly given the specific impact of the virus on the most vulnerable in society, many of whom have been in the adult social care system.  It is likely that the predictions of many health workers ‘burning out’ and leaving the profession will be mirrored in adult social care.

 

  1. Counties face specific challenges in recruiting care workers as they need to deliver over larger areas.  Some providers do not always fund travel time for domiciliary carers for example which can be distinctly longer in remote rural or coastal areas.  Some people who would be suitable to work in adult social care may not have access to their own transport and public transport is infrequent or even non-existent in areas outside of main conurbations.

 

  1. It is also anticipated that councils may face increasing need to support unpaid carers as the country enters the recovery phase.  The aversion to residential care and the spectre of ‘long covid’ identified earlier, as well as an increasing number of working-age people requiring care means more families are likely to be needing to provide this care themselves – often requiring them to reduce their employment or leave employment altogether.  This may require councils to look at how to offer more community-based support to help this group of carers and their families.

 

Digital Transition

 

  1. An important means by which more stability will need to be brought to adult social care will be through the increased use of digital technology within the system, particularly as a means of preventing more intensive care needs further down the line.  Many authorities are already looking at measures which can help them – for instance by using smart devices which can gather data that councils can use to better identify individuals needs and where they might at risk so they can get support in (for instance sensors which help identify if an older person has had a fall).

 

  1. Assistive technology supplied by LAs can also help reduce the burden on unpaid carers – for example investing in a smart speaker for someone with MS, can help them to operate more independently without needing their carer to do more mundane tasks.

 

  1. It is important that reforms to adult social care consider fully how local authorities can be properly resourced to invest in assistive technology going forward in the same manner that the health system is able to.


APPENDIX A – The Future of Adult Social Care Report: Summary

 


 

 

Briefing Document

A picture containing diagram Description automatically generatedIntroduction and context

To help shape and influence an evidence-based discussion on the reform of care services in England, the County Councils Network (CCN), Association of County Chief Executives (ACCE) and Newton have collaborated on an extensive programme of work that has sought to form a perspective on the future of adult social care and, in particular, what it takes to optimise the delivery of this vital public service in a reformed system. The subsequent report sets out what an optimised model for adult social care should look like, in terms of ensuring good outcomes are delivered cost effectively, and how it can be delivered locally and at scale across England. The programme of work involved extensive engagement and contributions from 24 county authorities and over 150 individuals (including leaders from health and care, care providers and individuals with lived experience). The evidence and insight presented also draws on Newton’s 20 years of experience delivering major change programmes within the sector.

The benefits of an optimised model


By fully adopting and implementing the model as detailed in the report, including ensuring the foundations and enablers detailed are fully in place, significant benefits could be achieved across all local authorities in England. This would improve outcomes, and in aggregate, reduce the demand for increased spending by an estimated £1.6bn per year. Some of the key service outcomes include:

 

The features of an optimised local delivery model

The basic idea that underpins the model is that designing and delivering adult social care needs to start from the fundamental principle of achieving the best and most independent outcomes for individuals. From this core, service ‘layers’ can then be built out, with each layer supporting, enabling, and reinforcing the values and beliefs. The model developed through this work has nine key features, briefly summarised below. These detail the practical elements of service delivery, the organisational enablers needed to achieve this, and the organisational and structural form which social care sits within.

 

Service Delivery

 

Organisational Enablers

 

Organisation and Structural Form

 

 

 

 

The foundations and enablers that need to be in place to achieve this

 

  1. A positive profile for adult social care that is fully understood and valued by decision makers, both in central and local government and importantly by the public; there remains a general lack of understanding of what adult social care is and how it is delivered, which can lead to confused decision making, a workforce feeling undervalued and a stigma associated with being a service user.
  2. An explicit set of social care values and beliefs; a sustainable system should put the individual at the centre of their own support and be designed to promote their independence. Social care values and beliefs, built around promoting independence, need to be clearly articulated and commonly understood across all partners involved in delivery.
  3. Local delivery, supported by national oversight; local government are uniquely placed to effectively coordinate and manage the overall social care ecosystem, with deep roots in informal care networks that exist in a community which play a vital role in delivery. Central government require the right governance and assurance mechanisms to retain visibility of performance and to intervene where required
  4. Investment in local and national adult social care leadership; strong and visible national leadership is required to steer, represent, and be the voice of the sector. Locally, recruiting high quality individuals, who can become leaders in the future is vital, enabling the local authority to fulfil its critical leadership role in aligning all service provision across a place.
  5. A whole system approach and partnerships with integrated care systems; Structures such as PCNs, ICSs, and Strategic Transformation Partnerships (STPs) are strategically aligning health and social care at a regional and local level more closely than ever.  This opportunity will only be realised in terms of better outcomes for the population if the structures, processes and governance are underpinned by a strong vision and common mandate, which is led by all partners, national bodies, and most importantly, understood and welcomed by the public itself.
  6. Developing the right funding model; the current model of funding adult social care – which relies on a balanced budget at the start of each financial year and is dependent on supplementary grants – prevents long-term thinking. A funding model which gives longer-term certainty would promote local accountability and support local leaders to make decisions in the best interests of the local population. This will enable local authorities to deliver the optimised delivery model described in the report.
  7. A new adult social care performance framework; a new, cross-departmental performance framework can provide a shared and data-driven understanding of local and national outcomes and the associated assurance, providing the basis for an open and transparent relationship with central government.

 

 

April 2021

[1] http://www.countycouncilsnetwork.org.uk/download/3166/

[2] The full length report can be accessed at http://www.countycouncilsnetwork.org.uk/download/3392/ whilst a summary can be downloaded from http://www.countycouncilsnetwork.org.uk/download/3388/

[3] Independent Review of Local Government Spending Need and Funding (PwC, 2019) https://www.countycouncilsnetwork.org.uk/download/2258/

[4] ibid

[5] ibid

[6] Adult Social Care Funding and the Spending Review (2019, CCN)

http://www.countycouncilsnetwork.org.uk/download/2397/

[7] ibid

[8] It is presumed that all authorities implemented the precept in full for the four years the policy was available. No precept is presumed from 2021/22 onwards.

[9] Danny Kruger MP – The Care Commitment (Demos, 2021)

https://demos.co.uk/wp-content/uploads/2021/02/The-Care-Commitment-Report.pdf

[10] The update from 2017 can be downloaded from here: http://www.countycouncilsnetwork.org.uk/download/1179/

 

[11] Planning For Retirement (CCN, ARCO, 2020)

http://www.countycouncilsnetwork.org.uk/download/3074/