News / Huge increase in funding needed to keep pace with social care demand

Annual spending on social care will need to increase by £600m next year and by £8.3bn over the next decade – a 3.4% real terms rise each year – just to keep pace with growing demand, the Health Foundation said this week.

The think tank, which has analysed the potential funding pressures in adult social care up to 2032/33, said that even more funding would be needed – up to £18bn, requiring 6% a year real terms increases – if the government also wanted to improve access to care and cover the full costs of care. The estimates compare with increases of just 2.6% on average between 2014/15 and 2021/22. 

There is plenty of evidence of rising demand for care, with significant levels of unmet need prior to the Covid-19 pandemic and further increases since then. According to estimates from the Association of Directors of Adult Social Services (ADASS), the number of people waiting for assessment for social care services more than quadrupled from 70,000 in September 2021 to 294,000 in April 2022.

Another report from the NHS Confederation – Adult social care and the NHS – illustrated that growth in demand more broadly. The number of people 65 and over in England has grown by 4% in the last five years, with the requests for social care services growing at generally the same rate, reflecting the increased and more complex needs of this population. 

In making its estimates, the Health Foundation has assumed that spending will continue at the recent rate of 2.6% up to 2024/25. Although the government announced further increases for social care in last year’s autumn statement for 2023/24 and 2024/25, the think tank said this represented the maximum that local authorities could spend – actual spending was likely to be lower because of multiple spending pressures. In setting its baseline case of just over £24bn, it has assumed 0% real-terms increase for the years beyond 2024/25.

The foundation also looked at other scenarios that moved beyond simply meeting future demand with the current levels of service provision. It calculated that enhancing access to care with the addition of a further 80,000 care packages – a 10% increase on the packages delivered in 2021/22 – would lead to a funding gap of £3.1bn in 2024/25 compared to the spending baseline. This would require a funding increase of £11.6n by 2032/33 – representing 4.3% a year real terms increases.

By factoring in the full cost of care, including staff pay, travel costs, energy costs and other overheads, on top of the increase in demand, spending would need to rise by 5.1% on average each year – taking spending to £14.6bn above the baseline in 10 years time. Finally, by accounting for both the total costs of care and of improving access, the 2032/33 gap grows to £18.4bn, requiring annual spending increases of 6% in real terms.

Miriam Deakin (pictured), the director of policy and strategy at NHS Providers, said that social care should not be the poor relation of the NHS. ‘Without reform to place the social care sector on a sustainable footing, knock-on problems for the whole health and care system will continue to pile up,’ she said. ‘NHS services need to work hand in hand with properly funded, staffed and supported social care to help people to remain independent with the right support at home, reduce avoidable admissions and help get people home or to a community setting when they are well enough to leave hospital.’

She added that, like the NHS, social care required long-term solutions to ensure it had enough staff and resources to meet growing demand for an ageing population with more complex needs.