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£2.6 billion could be needed to fix social care - LGA warns

Social care for the elderly and disabled could be facing a potential funding gap of at least £2.6 billion, the Local Government Association is warning today.

As part of its Autumn Statement submission to the Treasury, the LGA says that based on "fair price of care" calculations, the immediate pressures threatening the stability of the care provider market could amount to at least £1.3 billion.

The scale of underfunding in social care could see even more providers either pull out of the publicly-funded care market or go bust, placing vulnerable people at risk.

The LGA, which represents more than 370 councils in England and Wales, is calling on government to urgently work with councils and providers to calculate and fully fund this immediate pressure and avoid a large scale crisis.

On top of that, councils also estimate that by 2019/20, a further £1.3 billion will be required to deal with the additional pressures brought about by an ageing population, inflation, and the cost of paying the National Living Wage.

The Government should allow local government to use some of the extra business rates income it will keep by the end of the decade to plug this gap, say council leaders.

The LGA has set out an urgent call for action and says that unless social care is properly funded, it could mean:

  • Growing difficulties meeting basic needs such as ensuring people are washed, dressed and helped out of bed
  • Shorter care visits
  • Potential reduction in quality and safety of care
  • Increase in people being stuck in hospital rather than cared for in the community

The funding shortfall comes despite the extra money councils have been able to raise in 2016/17 by increasing council tax by 2 per cent to pay for social care, as well as the additional funding through the Better Care Fund at the end of the decade.

The LGA says the funding gap shows the scale of "the damage done" to the sector with councils having had to close a £5 billion funding gap within adult social care since 2010.

Councils are calling on the Chancellor to use his first Autumn Statement to provide the funding to ensure a fair care system where everybody can receive safe, high-quality care and support.

Unless this happens, the LGA is warning of the dangers of a two-tier system emerging between those able to choose and pay for their own care, and those reliant on increasingly overstretched council-funded care that is unable to meet people's needs.

In its Autumn Statement submission, the LGA also stresses the importance of putting overall council finances on a sustainable footing, to ensure adult social care is fully protected.

It warns that if councils have to make savings to fund pressures in other areas, a significant proportion of these would have to come from adult social care budgets, thereby exacerbating the problem.

Chairman of the LGA's Community Wellbeing Board, Cllr Izzi Seccombe, said:

"Our analysis shows the sheer scale of the funding crisis we face in social care, both now and in the near future, as well as the damage done from the historic underfunding of adult social care.

"Councils, care providers, charities and the NHS are all united around the need for central government to fully fund adult social care. This is essential if we are to move away from just trying to keep people alive to ensuring they can live independent, fulfilling lives, as well as alleviating the pressure on the NHS

"The care provider market cannot carry on as it is and there is a real danger of more widespread market failure. Either care is properly funded or providers will pull out of council contracts or in worst case scenario go bust. The market for publicly-funded care is simply not sustainable as it stands.

"Councils have an excellent track record in spending money wisely and efficiently, but are at the point where there is little room left to make further savings. There simply isn't the money left to pay providers at the level they say they need and we are in real danger now of seeing people suffer the consequences of this in the care that they receive.

"The current funding crisis risks creating an unfair, unequal, two-tiered care system where only the well-off will be able to get the care they need. If we are to have a fair and equitable society then we must be able to ensure that everybody is able to receive a high quality standard of care, not just those who can afford it.

"We must all aspire to ensuring the care our loved ones receive goes beyond just helping them to get washed, dressed and fed, but to supporting them to live dignified, independent lives."


The use of ‘fair price of care' calculations developed by provider organisations suggests that the scale of the immediate challenge could be in the order of at least £1.3 billion. This breaks down as follows:

  • Estimated additional cost of paying the UKHCA ‘fair cost of care' rate for homecare: £265m
  • Estimated additional cost of paying the Laing & Buisson floor ‘fair cost of care' rate for older people in residential care: £1,025m

Another £1.3 billion will be required by 2019/20 to fund the additional pressures brought about by an ageing population, inflation, and the cost of paying the National Living Wage. This figure takes into account the Government's projections of the additional funding for adult social care through the council tax precept and additional funding for adult social care through the Better Care Fund by the end of the decade.

These figures take no account of cost pressures such as Deprivation of Liberty Safeguards, the closure of the Independent Living Fund, full implementation of the Care Act or unmet need.

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