Adult Social Care Funding (England)

Research Briefing

Published Friday, 11 December, 2020

• Research Briefing
• Communities
• Community care
• Local government

• David Foster
• Mark Sandford
• Rachael Harker

This Commons Library briefing paper examines the key funding pressures facing adult social care services in England and their impacts. The paper also sets out the additional funding committed to adult social care since 2016/17 and briefly summarises recent select committee reports on adult social care funding.

Documents to download

• Adult Social Care Funding (England) (517 KB, PDF)

  Download full reportDownload ‘Adult Social Care Funding (England)’ report (517 KB, PDF)

Adult social care funding has been under pressure for a number of years and was identified as the top long-term pressure for councils in a Local Government Finance Survey carried out in January 2020.

There are a number of factors driving these financial pressures, including:

• increasing demand for care
• reductions in overall funding for local government
• increases in care costs
• the coronavirus outbreak.

There is concern that, as a result of funding pressures, an increasing number of people are not having their care needs met or are facing ‘catastrophic’ care costs. There is also evidence that funding pressures are impacting on the financial sustainability of care providers and that, in some areas, a lack of suitable care provision is adding to pressures in the health service.

Additional social care funding 2016/17 to 2019/20

In response to the funding pressures on adult social care services, the 2015 and 2017 Conservative Governments made a series of announcements committing additional short-term, ring-fenced funding for adult social care. This comprised:

• A Social Care Precept, under which local authorities were able to increase council tax levels by up to 2% (above the referendum threshold) for each year between 2016/17 and 2019/20. In December 2016, the Government announced that local authorities could bring forward the Social Care Precept, by raising council tax by up to 3% in 2017/18 and 2018/19.
• An improved Better Care Fund, which included additional social care funds of around £4.4 billion between 2017/18 and 2019/20.
• An Adult Social Care Support Grant which provided £240 million to local authorities in 2017/18 and £150 million in 2018/19.
• A Social Care Support Grant of £410 million in 2019/20 to support both adult and children’s social care services.
• An additional £240 million in both 2018/19 and 2019/20 for social care packages to ease NHS winter pressures.

Additional social care funding from 2020/21

At the Spending Round 2019, the Government set out the additional funding that would be provided for adult social care in 2020-21:

• An additional £1 billion grant for adult and children’s social care (local authorities to determine how to split their allocation between the two).
• The Government would consult on a 2% Social Care Precept, which it estimated would enable local authorities to access a further £500 million. This was confirmed in the local government finance settlement 2020-21.
• The rolling-over of existing social care grants of £2.5 billion into the 2020/21 financial year.

At the March 2020 Budget, the Government confirmed that the additional £1 billion of funding for social care would continue for every year of the current Parliament.

At Spending Review 2020, the Government set out the additional funding that would be provided for adult social care in 2021-22:

• An additional grant of £300 million for adult and children’s social care, on top of the £1 billion announced at the Spending Review and maintained in 2020-21.
• Local authorities will be able to levy a 3% adult social care precept.
• £2.1 billion to local authorities through the improved Better Care Fund.

Health and Social Care Committee Report

In its October 2020 report on adult social care funding and workforce, the Health and Social Care Committee set out the impacts of adult social care funding shortfalls and called for “an increase in annual funding of £3.9 billion by 2023-24”. It added, however, that this was just a starting point and “further funding…is required…as a matter of urgency“ to “address shortfalls in the quality of care currently provided, reverse the decline in access or stop the market retreating to providing only for self-payers.”

The final section of the Committee’s report covered the longer term reform of social care funding and stated that “the full cost of adequately funding social care” is likely to run “tens of billions of pounds.”