Gap in care funding ‘can no longer be ignored’ – what will the Chancellor’s spending review do?

An in-depth look into last week’s spending review and the ramifications for the care sector.

Last week’s governmental spending review was eagerly awaited by all with a vested interest in health and social care, with ramifications likely to be felt until after the next election in 2020.

Earlier in November, an alliance of 15 social care bodies, including charities, care providers and local councils, sent a joint letter to the Chancellor, warning of a £2.9bn-a-year funding gap that would emerge by 2020, resulting in the closure of potentially half the UK’s NHS care homes.

The letter urged the Government to face up to a situation that “can no longer be ignored… Since 2010, £4.6bn of cuts have already resulted in an estimated 500,000 older and disabled people being denied access to care.”

What we have learned

The most significant point in the spending review for social care is the Chancellor’s pledge to allow local councils to keep 100% of business rates and raise council tax rates by up to 2%. It’s claimed that this will generate an additional £2bn a year for social care in the UK, while councils will also gain access £1.5bn “better care fund” by 2017.

The Local Government Association has pointed out that such a move would leave poorer areas more restricted in terms of funding because of lower council tax revenues, and local councils have indicated spending cuts now being made elsewhere as a further strain on their budgets, likely to significantly eat into the additional revenue.

The Department of Health’s budget is being cut by 25%, meaning significant restrictions for primary care bodies, especially in recruiting and training healthcare professionals. The number of health professionals is likely to fall – a real concern, given recent reports that 74% of home-care providers working with local councils would have to reduce time spent on publicly funded care, potentially affecting up to 50% of people who rely on these facilities.

Responses to the spending review from experts

John Appleby, Chief Economist at The King’s Fund, said: “We welcome the drive to fully integrate health and social care by 2020… While these measures provide some recognition of the pressures facing social care, they are not a substitute for sustainable funding… This may be a good settlement for the NHS in the circumstances, there is no hiding how difficult the next few years will be for health and social care services.”

Nigel Edwards, Chief Executive of the Nuffield Trust, said: “Despite [the] extra investment in social care, care services in England remain on the brink of collapse – increasing funding for the NHS while leaving local councils short of cash is like painting the front door while the house is on fire… That gap in funding [£2.9bn] will mean more frail elderly people marooned in hospital beds despite being medically fit to go home”.

Fiona Lowry, CEO of The Good Care Group, comments: “What we need from the Government is a more coherent commitment to funding for health and social care. While the Chancellor has addressed some of the headline-grabbing concerns, it’s evident that there will be gaps in funding for care home services, leaving vulnerable people stuck in hospital. We know that a huge majority of elderly people prefer to be cared for at home, and that the evidence points strongly towards better outcomes for recipients of care at home. Our highly-trained, live-in carers can provide a better quality of life for loved ones in the security and dignity of their own homes.”

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