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Watchdog warns of funding gap for new Care Act

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The National Audit Office (NAO) has warned that councils could face a shortfall in funding following the introduction of the new Care Act. 

A report by the NAO has examined the first phase of the 2014 Care Act, which came into force in April 2015. The NAO said that the changes had been well managed, but warned that the Department of Health may have underestimated the demand for services and cost to local authorities, while also cutting funds by a quarter over the past five years.

Despite an allocated budget of £1.2 billion, the NAO estimated that increased demand could add another £27 million to this year’s costs. Their report states: "with the level of demand so uncertain, the Department's cost estimates and chosen funding mechanisms put local authorities under increased financial risk. In a challenging financial environment, with pressures on all services, local authorities may not have sufficient resources to respond if demand exceeds expectation. In response, local authorities could delay or reduce services in the short term, risking legal challenge and potentially creating extra burden for individuals, their families and carers."

Izzi Seccombe from The Local Government Association said: "Councils are implementing the Care Act at a time when rising demand and escalating costs means that the adult social care system is already under immense stress. While the Government has committed to monitoring additional costs of the first phase of the Care Act, councils still anticipate it could be underfunded by as much as £50 million. If this is the case, it could leave them without the resources they need to care for the most vulnerable in society.”

Sue Brown, of the Care & Support Alliance, added: "The Government needs to urgently address the crisis in care funding to prevent the care system from total collapse in the next decade."

In response to these findings, Fiona Lowry, CEO of the Good Care Group, commented: “NAO’s findings are concerning, as restricted resources could leave elderly people without the support they need. We know that many people worry about home-care costs, and so at Good Care Group, we offer advice on care funding, and we’ll help you find suitable options from our range of care provision. We are committed to ensuring that your loved one gets reliable, personalised care, in the comfort of their own home.”

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