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£4.4bn gap in social care funding for England within five years, warns think tank

There won’t be enough cash to meet rising demand and plug critical staffing shortages in the sector, says The Health Foundation

Caroline White

Friday, 31 May 2019

England faces a social care funding gap of £4.4bn in 2023/24 to meet rising demand and address critical staffing shortages in the sector, health think tank The Health Foundation has warned in a new analysis*, published this week.

In the absence of an additional funding commitment, the money available for adult social care will rise at an annual average rate of 1.4% a year.


This is much lower than the 3.4% a year the government has committed to the NHS. And it is well below rising demand of 3.6% a year, as increasing numbers of elderly and younger adults need help with day to day activities such as washing, eating and dressing, says the Foundation.

The think tank also points to poor pay and conditions in social care as a major threat to the quality of care and future sustainability of the sector.

Staff turnover has been increasing since 2012-13 and there are over 110,000 vacancies in adult social care. Over 40,000 nurses work in adult social care, but almost a third are estimated to have left their role within the past 12 months. Adult social care wages are low and below equivalent salaries in the NHS.

After years of capped pay, NHS salaries are now increasing. But The Health Foundation says it is hard to see how adult social care providers can continue to recruit and retain staff in the face of rising pay in the NHS and uncertainty around international recruitment made worse by Brexit.

More than 90% of care workers, including those from the EU, earn below the proposed £30,000 salary threshold required to obtain a visa after Brexit.

Social care funding in England has long been neglected by politicians at a time when demand is increasing, say the report authors. The number of over 85s has risen by over a fifth since 2010. If funding levels had grown in line with demand since then, when public spending on social care peaked, spending would have been £6bn higher in 2017-18.

The Health Foundation’s analysis also shows that England spends considerably less on publicly funded adult social care per person than Scotland and Wales, and that gap has widened since 2010-11.

In 2010/11, England spent an average of £345 per person compared to £457 in Scotland (32% more) and £445 Wales (29% more).

But while adult social care budgets in all three countries have since fallen in real terms, Scotland and Wales have provided more protection for funding. Today, England spends £310 per person compared to £445 in Scotland (43% more) and £414 in Wales (33% more).

While variation in per capita spending between the UK countries might partly be explained by differences in populations and care needs, gaps in spending are far less pronounced in health care and have even narrowed in recent years.

While health care spending in Scotland and Wales has grown since 2010-11, England’s spending has grown faster: Scotland now spends just 8% more per person on publicly funded health care and Wales, just 3% more.

Anita Charlesworth, director of economics and research at The Health Foundation, said: “Adult social care is one of the victims of the current political impasse but is in urgent need of funding and reform. Pressures on the service continue to grow at a much faster rate than funding.

“More people need care but we also need to ensure that care is high quality. Staffing is a key determinant of both quality and cost. With around two-thirds of staff at the minimum wage and a quarter on zero hours contracts, it is perhaps unsurprising that adult social care providers are struggling to attract and retain workers.”

She warned that the planned changes to limit international recruitment also presented a major challenge to a sector that is highly reliant on staff recruited from overseas.


“Rising demand and competition for the same pool of workers from other sectors, including the NHS, will compound these problems,” she said.

“Tackling the challenge of social care reform will require decisive political action and an appropriate funding settlement. Successive governments have ducked the challenge and the tragedy is that vulnerable people and their families are suffering as a result. If reform remains unaddressed, social care’s inadequacies will continue to undermine the NHS, and people in need of care will continue to fall through the cracks.”

Director of policy and strategy at NHS Providers, Miriam Deakin, said the findings underlined “the perilous state of the social care sector.”

“We must urgently take steps to close the growing gap between the demand for social care services and the funding available. Further inaction to agree to a sustainable funding model and address severe staff shortages in the sector risks leaving vulnerable people without the care they need,” she insisted.

“The NHS and social care are two sides of the same coin. We must invest appropriately in social care services if people are to access the health and care support they deserve, and to avoid additional pressure on accident and emergency services.

“We must see movement on this through the forthcoming spending review and green paper.” 


*Charlesworth A, Watt T. The real cost of a fair adult social care system. The Health Foundation, 29 May 2019.

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