Spending review: Greater certainty is needed on social care reform

By Dr Eleanor Roy | 26 November 2020

The 2020 Spending Review announcement was without doubt positive in some areas and negligent in others. The review was an opportunity to resolve the issues facing our crucial services and dedicated frontline workers, but again, it seems like we just have more unanswered questions and lack of support for many at the forefront of fighting the pandemic.

The announcement detailed a bleak outlook for economic recovery following the pandemic. Substantial funding was dedicated to infrastructure and the levelling up agenda. While this is welcome, uncertainty remains over the resilience of local authorities and the social care sector.

During the announcement, the chancellor announced a £6.3bn cash increase in NHS spending over the next year, along with a renewed investment in training, infrastructure, equipment and recovery. This is welcome but does little to address the serious pressures faced by the wider health and care sector in facing the pandemic and its aftermath.

The statement was far less generous towards adult social care, with up to £1bn being made available. This consists of the power to levy a precept of up to 3% for adult social care and an additional £300m in social care grant. There was also confirmation that the £1bn social care grant from the current year would be maintained. The 3% precept, if levied in full, could raise around £690m. The additional social care grant, both the new and the roll over, will be split between both adults and children’s social care. Assuming this is done on a 50:50 basis, as has been the case in previous years, this means that additional funding for adult social care next year is only £840m. Of course, even this is reliant on the ability of local authorities to raise additional funds through the precept.

As it currently stands, many directors of adult social care have no confidence they will be able to meet their statutory duties next year. Social care providers do not have certainty that they will be able to maintain the same level of service that they are offering, or even stay afloat.

This Spending Review was a missed opportunity to provide adequate funding and a firm foundation for the long-awaited reforms that the government has committed to bring forward. Such reform is now desperately needed and must take account of not only the problems that have arisen as a result of COVID-19, but also challenges that preceded this crisis – as set out in our publication ‘The Road to Reform: COVID-19 as a catalyst for change in funding social care’.

The poorly received public sector pay freeze was also addressed by the chancellor. Some NHS employees will get a pay rise, while the rest of the public sector will have their salaries frozen. Public sector workers and NHS staff will be guaranteed a pay rise of a minimum of £250 if they earn less than £24,000 per annum. Though average care workers typically earn below this margin, many in this sector are employed by private providers and will therefore not have access to these pay increases. The changes to the minimum wage, while welcome and deserved from the perspective of the hardworking staff, will also put further pressure on providers and in turn local government, these costs will also have to be met from the additional funding provided.

Uncertainty also remains in other important areas of funding which went conspicuously unmentioned during the Chancellor’s speech. The Spending Review document refers to £2.1bn for the Improved Better Care Fund (BCF), but there is no mention of the wider BCF arrangements for next year. The public health grant is only referred to as being ‘maintained’. Considering the year we have had, this is astonishing. Public health teams in local authorities have a crucial role to play and must be properly funded in order to provide the high levels of care that are desperately needed at this time.

Service providers are facing greater pressures than ever before. The fact that the government failed to recognise this by providing the support that is desperately needed is unacceptable. We anxiously await further details about what additional support the social care sector will receive in the coming months.

Dr Eleanor Roy is health and social care policy manager at CIPFA

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