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LGA - Invest £5.2 billion in prevention to overhaul health and social care, Government urged

Investing a further £5.2 billion in prevention and helping people stay healthy is urgently needed to overhaul the way social care and health services are provided and reduce growing pressures on the system, social care experts warned yesterday.

new report by Ernst and Young (EY), commissioned by the Local Government Association (LGA) and based on sector views, proposes to the Government to use next month's Budget to divert £1.3 billion into a transformation fund each year until 2019/20, equalling a fund of £5.2 billion by the end of the decade, to develop a new health and social care system.

The report suggests a transformation fund should focus on preventative measures and aim to prevent complex and long-term conditions, which can cost the system almost £88 billion each year - a cost that is growing with the ageing population.

It identifies the significant contribution that preventative measures can make. For example, spending just £1 on local friendship networks can save almost four times that amount on mental health services whilst £1 spent on school-based smoking and bullying prevention can save as much as £15.

The report also recommends that the transformation fund should be supported by a pooled health and social care budget of at least £6.6 billion in 2016/17, eventually leading to the pooling of all money for health and social care.

Figures show that 30 per cent of health and care service users use almost 70 per cent of the health and social care budget and the LGA has long warned that the adult social care system is under immense and growing pressure.

The necessity for further budget savings worth £1.1 billion this year combined with growing demand and escalating costs mean that despite councils' best efforts they are having to make tough decisions about the care services they can provide.

A transformation fund would help local government leaders to protect the future of social care for the elderly and disabled by investing resources into a system which focuses on keeping people healthy and out of hospital, rather than putting the majority of money into providing care for serious conditions. Local authorities and health partners recognise that social care must be properly funded to enable councils to alleviate pressure on health services.

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

"This report supports what councils leaders have long been warning, that we need an urgent and radical change to the way in which we provide care for the elderly and disabled.

"We need to think now about how we help people to stay healthy, rather than pick up the pieces when it is too late. This is not fair on people who deserve the best and most dignified care and it is putting an additional pressure on a system caring for a growing number of people with complex needs and which is already buckling under the strain.

"It is social care services which keep people out of hospital and living in the community for longer. Social care and health are two sides of the same coin – it is quite clear that without adequate funding, social care simply cannot alleviate the pressure on the NHS. No one wants to see their elderly or disabled relative stuck in hospital when they could be at home – but sadly this is something we still see too often.

"The LGA has long argued for a bigger and longer Better Care Fund, with a transformation fund, so that more money can be put into prevention rather than continual crisis management and to make the system more sustainable. The Government needs to invest money in a system which will be there to look after people now and in the future, and commit to a long-term strategy to ensure that people get the care they need."

The LGA will be using EY's findings to outline what councils need from the Government in the coming Comprehensive Spending Review.


  1. Full report available here: Creating a better care system
  2. In winter 2014, the LGA commissioned EY to support the development of a description of better care and support for the future. The report consolidates the findings and conclusions as a result of significant engagement with the LGA, local leads and partner organisations. The views and ideas put forward were developed and approved with the LGA.
  3. A transformation fund of £1.3 billion each year is based on 13/14 projections for the gap in adult social care funding and assumes no additional funding cuts in the Spending Review, and that wider public services are protected.
  4. This report follows recent warnings from the Office for Budget Responsibility that funding the NHS as it is today could add about £1.8 trillion to the national debt in 50 years unless productivity is improved and echoes figures by NHS Confed which showed that 99 per cent of senior NHS managers and directors believe that cuts to adult social care is putting extra pressure on the health service.

Other recommendations in the EY report include:

  1. Full integration of the whole social care and health system by 2020 to deliver the significant change required.
  2. Government should align the level of protection across health and social care budgets and provide a five year settlement for both health and social care.
  3. Give local areas greater control and freedom over pooled budgets and additional devolved powers to set public health policy that is more ambitious than national law, allowing opportunities to address the biggest public health issues.
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