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Short-term social care funding ‘not having desired effect’, report suggests

Millions of pounds of funding into social care last year is said to have made no difference to the financial sustainability of the majority of providers surveyed for a report into a sector described as being in a “sustained state of crisis”.

Some 84% of adult social care providers asked about funding initiatives implemented across 2023 said the investment had made no impact on their financial sustainability, according to a snapshot report.

Investment last year included £365 million in ringfenced funding to local authorities to improve and increase adult social care provision, with a particular focus on workforce pay through the market sustainability and improvement fund, and a £15 million fund to help support international recruitment in the sector.

A joint report by learning disability charity Hft and Care England, which represents providers, the Government’s “significant number of interventions” to support the sector “should have been seen and felt on the front line over the year”.

But it said its survey of 122 organisations across England suggested this was not borne out on the ground, with many providers saying they struggled to access funding when it was delivered through local authorities, with various different conditions being attached to them receiving it.

The report said short-term sporadic funding measures, rather than a long-term sustained settlement could be the “driving factor behind this lack of tangible impact”.

It said: “It is clear that as the system is currently structured and funded, additional funding and interventions are not having the desired effect.

In the foreword, Hft chief executive Steve Veevers and Care England chief executive Professor Martin Green, said: “Mechanisms to deliver government grants are not fit for purpose and are failing to reach, and make a difference for, the organisations who need it most.

“As many others from across adult social care have called for, root and branch reform is needed, with greater consideration lent to how funding is administered through local authorities and the transparency of that process.”

Other findings showed more than two fifths (43%) of providers had closed a part of their organisation or handed back contracts last year as a result of cost pressures, while almost a fifth (18%) offered care to fewer people, both as a result of cost pressures.

Those pressures saw 19% of providers having made staff redundancies and 39% considering the idea of exiting the market altogether, the report found.

The proportion of adult social care providers which reported a deficit – whereby their spending exceeded their income – fell slightly last year to 40%, compared with 43% in 2022 but remained much higher than in 2021, when only 9% of participating providers reported being in deficit.

Workforce-related costs were still the main challenge facing providers but the proportion reporting this as their top cost pressure fell from 92% to 81% – a decrease the report authors suggested could be down to successful overseas recruitment which cuts the need for expensive agency staff.

Utility bills were the second biggest cost pressure, with a 72% average rise in energy costs being reported and some individual providers saying they had to deal with increases of up to 350%.

Dementia study
A survey of 122 organisations across England looked at the issues faced by the social care sector (John Stillwell/PA)

Among recommendations for the future, the report called for VAT reform so that a surcharge on energy bills for adult social care providers is removed.

It also called for the establishment of national commissioning standards to address the “messy and complicated” landscape which currently exists in terms of assessing and providing for care needs, and better support to guide providers through the “complicated and bureaucratic international recruitment process”.

Mr Veevers said: “It is difficult to offer words of hope and motivation when the past 12 months have seen the adult social care sector engulfed in a sustained state of crisis.”

He described it as disappointing that “despite additional investment from Government we continue to operate amid significant challenges”.

He added: “The upcoming general election provides the new Government with a perfect opportunity to address what is a key challenge for today’s society but one which nobody seems to be taking seriously enough.

Professor Green said the sector appears to be in “a worsening crisis amid the Government’s narrative of ‘record investment’ into the sector”.

He added: “While the Government did make substantial commitments in the 2022 autumn Budget, the outcomes have not matched the ambition. The new money into the sector has not led to tangible change or any significant progress towards ‘fixing adult social care’.”

Calling for a rethink in the way the system is funded, he said the sector’s needs “are now on red alert”, lamenting an “insufficient” local government finance settlement and changes to visa rules banning overseas workers bringing dependants.

Both signify “a Government that is heading in the wrong direction”, he said.

The survey ran in September and October and was made up of 47% providers which care for adults with learning disabilities and/or autism and 53% which give care for older people.

A spokesperson for the Department of Health and Social Care said the Government has invested £8.1 billion “to put the adult social care system on a stronger footing, enabling local authorities to buy more care packages, help people leave hospital on time, and reduce waiting times”.

They added: “We have made significant progress in delivering the People at the Heart of Care plan, our ambitious 10-year vision which will transform care in England.

“Last week, we also announced a major boost to the care workforce through the creation of a new accredited qualification meaning for the first time, there will be a national care career structure, giving the profession the recognition it deserves.”

David Fothergill, from the Local Government Association, said: “This concerning report shows the multitude of pressures care providers are facing due to lack of financial support.

“It is particularly worrying to see the findings regarding the amount of providers considering leaving the sector altogether, workforce redundancies and fewer people being offered care, all of which could have devastating impacts on people drawing on care.

“We urgently need the Government to ensure additional funding to support the care sector and allow providers to deliver the crucial work that communities need.”