News / Social care funding squeeze will continue to increase pressure on NHS services

01 February 2017 Seamus Ward

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Pressure on the NHS will continue to increase
and some of the most vulnerable people will not get the care they need because councils are struggling to meet the rising cost of social care, according to social services leaders. Margaret Willcox

The warning came despite the government allowing local authorities to increase the social care precept by an extra 1% (3% instead of 2%) over the next two financial years. 

And, highlighting the pressure social care demands are placing on councils, Conservative-run Surrey County Council announced it would hold a local referendum on increasing council tax by 15% to pay for additional social services. 

The council said its annual grant from central government had been cut by £170m a year since 2010 and, despite finding £450m of savings, it had no choice but to recommend the increase as the services had been ‘brought to breaking point’.

The Association of Directors of Adult Social Services (ADASS) said social care needed significant and long-term funding. A report by market intelligence firm LaingBuisson found that the average fee paid by councils per care home resident in England was more than £100 a week less than the real cost of services. 

Setting a return on capital of 11%, and basing its calculation on average pay rates, LaingBuisson said residential care homes needed to charge between £590 and £648 a week. The higher fee represents newer homes, while the lower rate reflects homes passing basic standards.

Stripping out council overheads, the firm estimated that English councils are paying an average of £486 a week in 2016/17 – £104 below the lower end of its fee range.

ADASS president elect Margaret Willcox (above) said: ‘These findings reflect universal concerns about the escalating social care crisis, resulting not least in councils struggling to meet rising costs.’

Councils were doing all they could to protect adult social care, but funding had been squeezed and pay costs were rising. Although 82% of councils had increased fees paid to care homes last year, in separate work ADASS found two-thirds of local authorities had closed residential and nursing homes, while care home providers had handed back contracts to more than half of councils. 

Ms Willcox added: ‘It is a cause for celebration that more people are living longer but they are doing so with increasingly complex needs. Without significant, sustainable and long-term funding, the funding crisis means thousands of older and disabled people, their families and carers will face an increasing struggle to get the care and support they need. NHS delays will continue to increase, more care homes will close and there will be more gaps and failures in the provider market.’

LaingBuisson founder William Laing said that the adoption of the national living wage and requirements to employ more carers to support residents with increasingly complex dependencies has fuelled an ‘inexorable rise’ in care home costs. 

‘Most councils responsible for supporting publicly funded residents do not have the budgets to pay a reasonable cost for care and despite councils’ freedom to raise further funds from the social care precept, the situation is unlikely to change in 2017/18.’