Not far enough

by Sarah Day

24 September 2021


Additional social care funding will focus on capping care costs for individuals. But this does not start to address the underfunding of local authorities to meet growing demand and improve the financial sustainability of the sector

The political focus on the NHS and adult social care is particularly sharp in the wake of Covid-19. The Health and Care Bill is currently working its way through the lengthy parliamentary process of debate and analysis. It heralds a new, more integrated health and care system from April 2022. But the political focus doesn’t end there.

At the beginning of September, the prime minister announced a new plan for health and social care. Underpinning this plan was a new health and social care levy. The levy will raise £36bn over the next three years. (The HFMA set out the key points of the plan in a summary.)

But dig a bit deeper and the plan doesn’t do that much for the financial sustainability of the whole health and care system. While £36bn is a lot of money, economist Sir Andrew Dilnot has previously estimated that an additional £10bn is needed just to address the current gap in adult social care funding. And the Commons Health and Social Care Committee’s 2020 report on social care funding suggested £3.9bn a year extra would be needed simply to meet demographic changes and planned increases in the national living wage.

But despite these significant social care deficits, initially it is the NHS that will benefit from the new investment, through investment to address the elective backlog.

It is unarguable that people are waiting much longer for healthcare and cases may be more complex as a result of the increased waiting. It will take several years to reduce waiting lists and we know that waiting for treatment can impact employment, education and other factors that directly impact health inequality. So investing in tackling the elective backlog is the right thing to do. But the need for investment in social care is just as urgent.

Much of the funding announced for social care will pay for reducing the amount that people have to contribute towards their care. People having to sell their homes to pay for care in later life is an emotive subject and the £86,000 cap on lifetime care costs will be of benefit for some.

But it doesn’t increase the amount available to local authorities. The new tax won’t mean that closed services that supported working age adults, or the elderly, will reopen. It doesn’t give local authorities the headroom to address the unmet demand for social care in their populations. And that demand is increased by the long waiting lists in the NHS.

In July, the HFMA held a joint roundtable with CIPFA to consider the future financial sustainability of health and social care. The key questions were whether the Health and Care Bill meets the needs of local systems to improve population health and how to deliver a financially sustainable health and social care system for the future. (The full write up can be found here.)

Unfortunately many of the issues raised at the roundtable are not addressed by the government’s new plan. We may talk about integrated care systems and having close local relationships to deliver care for our populations but, at a national level, health and social care remain resolutely separate.

Those at the roundtable shared a huge passion for working together, for doing the right thing for their population. And there is much in the bill to support this, through the removal of some legislative barriers to integrated working. The importance of relationships shone through the discussion, with dictated governance structures sometimes getting in the way of collaboration but not preventing it.

However the Health and Care Bill focuses on NHS structures and misses an opportunity to really recognise the importance of joint decision making across health and social care. The newly published plan states that there will be yet another plan later in the year to further improve integration across the two sectors (you could argue that that was part of the role of the Health and Care Bill) but until their co-dependency is recognised at a national level and supported by adequate funding, health and social care cannot act as equal partners.

This is understood at a local level, with many current integrated care systems (ICSs) choosing to use the concept of a local health and care pound. When the ICS considers how to invest its funding, it may choose to ignore the traditional organisational boundaries and instead consider where that pound could make the most difference to the population.

The need for a long-term sustainable funding settlement remains essential for the whole health and social care sector. The forthcoming spending review offers an opportunity to give that longer term certainty. But many believe that the NHS has already received its settlement and the promise of a consultation on a social care white paper in October to ‘commence a once in a generation transformation to adult social care’ suggests that funding certainty may still be some way off for everybody.



HFMA roundtable: the future financial sustainability of health and social care