Adult Social Care Reform: The Cost of Inaction

The current adult social care system does not sufficiently meet the needs of the population despite the efforts of millions of paid and unpaid carers. Financial pressures mean that those needing care sometimes only receive basic support, far from enough to enable them to live fulfilling lives. Despite this, costs continue to increase, with the Government, and taxpayers, currently paying £32 billion a year for a broken system. The Government does not have a robust understanding of the extent of the current system’s failings to provide people with the care they need. Nor does it have robust data on the outcomes of delivering high quality care. Without this, it will be unable to make a clear case for reform. (Conclusion, Paragraph 20)

The Government should publish an annual assessment of the level of unmet care needs for both older adults and working age disabled adults, publishing its methodology and supporting data to ensure transparency and allow for scrutiny. (Recommendation, Paragraph 21)

The Government must also develop a robust methodology for measuring the impact of care on people’s lives, the wider health system, and the economy. As well as supporting the case for reform, such methodology would help councils to deliver outcome-based commissioning, which is more likely to provide people with meaningful care than the current task-based approach. (Recommendation, Paragraph 22)

There have been multiple failed attempts to advance a version of Dilnot’s reforms, during which time more and more people are faced with unknowable social care costs, and inflation has eroded the value of the upper threshold, meaning fewer people benefit from it. We note the establishment of the Casey Commission and hope it succeeds where previous reforms failed. (Conclusion, Paragraph 28)

Given how often this was raised as an issue, we recommend that the Casey Commission considers measures to address the erosion of the upper threshold. In the meantime, we recommend the Government does the same. (Recommendation, Paragraph 29) 53 Unpaid carers: the hidden cost of inaction

Unpaid carers are bearing the highest cost from successive governments’ failures to reform adult social care. They provide care worth £184 billion, “equivalent to a second NHS”, but this is often unrecognised and comes at great personal, emotional and financial cost as well as a cost to their own health. Carers can’t do the vital work they do to support the formal system if nobody is caring for them, and the moral and financial case for doing so is clear. We were not able to find official estimates of the cost to the Exchequer of the failure to properly support unpaid carers’ employment opportunities. However, given that one study placed it at £1 billion in 2012 the potential return on investment for supporting unpaid carers could be substantial. (Conclusion, Paragraph 47)

We recommend that the Casey Commission includes a specific workstream dedicated to reducing the pressures on carers, especially young carers. This workstream should consider how to support unpaid carers better, to ensure they get the respite they need and to look after their own health and wellbeing. It should also consider how businesses could be better incentivised to employ and support unpaid carers. (Recommendation, Paragraph 48) Costs to the care system

Local authorities are buckling under the strain of the costs of providing adult social care. The current system is unsustainable. Failure to reform adult social care, especially the funding structure, comes at a significant cost to local authorities. The increasingly high proportion of spending on adult social care is crowding out spending on other services, such as fixing potholes, keeping libraries open and providing youth services, forcing many to provide only the bare minimum to residents. It is also preventing councils from reducing future demand for adult social care through investment in prevention activities. There is a growing disconnect between what is paid for and what residents expect to be delivered, risking an erosion of faith in democracy. There needs to be a more open public conversation about what is driving a reduction in council services and how adult social care contributes to that. (Conclusion, Paragraph 60)

We recommend that securing agreement on the funding structure must be the top priority for the Casey Commission and for any future Government reforms. Without this agreement, reform can only ever be piecemeal and short-term in outlook and, ultimately, will fail. We also recommend that any future funding structure includes a ring-fence for preventative work. (Recommendation, Paragraph 61) 54

The funding structure for adult social care, rising costs and the inability to make long-term investment, is creating an unstable and unsustainable care market. Providers are making losses, creating inequities by charging more to self-funders or even planning to close entirely. The Government has not properly considered either the immediate or long-term impact of Budget measures, such as Employer National Insurance Contributions and the National Living Wage, on care providers’ staffing costs. (Conclusion, Paragraph 73)

We recommend that any future policy changes or fiscal decisions relating to the workforce should be accompanied by a cross-government impact assessment that sets out the immediate and ongoing consequences for the social care sector. As part of this, the Government should set out what mitigating actions they would take to minimise any adverse effects on the social care sector, and how that compares to actions being taken to support the NHS. (Recommendation, Paragraph 74)

We recommend that the Casey Commission prioritises identifying interventions to create a more sustainable care market. (Recommendation, Paragraph 75)

Low pay does not adequately recognise the level of skill adult social care workers need to do very difficult physical and emotional work. It is both morally unacceptable, and economically shortsighted, that the current pay regime is pushing some into poverty. Higher wages would achieve better quality care and reduce recruitment and training costs. We welcome increases to the National Living Wage. (Conclusion, Paragraph 85)

We further welcome plans to establish the Adult Social Care Fair Pay Agreement and improve career pathways. However, the Government needs to set out how these measures will be funded, as providers and local government cannot afford to fund them. (Conclusion, Paragraph 86)

We recommend that the Department for Work and Pensions explores collecting occupational data for benefit claimants, to better understand the cost to the Exchequer of low pay for care workers and to support the case for better pay. (Recommendation, Paragraph 87)

We recommend that the impact assessment for any secondary legislation to establish an Adult Social Care Fair Pay Agreement be accompanied by a full quantitative analysis, including the impact on sector productivity, financial costs faced by providers and expected return to the Exchequer (through tax receipts or reduced welfare claims) and the wider economy. We also ask that the Department, in its response to this report, sets out when discussions on the Adult Social Care Fair Pay Agreement will begin and when the agreement will be finalised. (Recommendation, Paragraph 88) 55 The NHS and wider system costs of inaction

Social care is a vital public service in and of itself and should not be valued only for how it supports the NHS. However, the current state of adult social care is imposing significant costs on the NHS. The best estimate we found was that delayed discharges alone are costing almost £1.9 billion. This does not account for other costs such as postponed procedures or admissions that could have been prevented by better social care. If DHSC is to make the best case to HM Treasury for investment in reform of adult social care, it needs to have better data on the impact the status quo is having on one of the Government’s top domestic priorities. (Conclusion, Paragraph 100)

We recommend that the Department provides an official estimate of how much delayed discharges are costing the NHS, broken down by the reason for the delay and including costs associated with the beds themselves, staff time and wider activity that cannot happen as a result of a delayed discharge. This should be published and updated annually. (Recommendation, Paragraph 101)

We recommend that the Casey Commission undertakes research to better understand the costs that the NHS is bearing as a result of failures in adult social care, and where the NHS is saving money due to good social care. This should be used in future departmental budget setting processes and to make the case for moving ahead with adult social care reform. When the Casey Commission completes its work, the Government should continue this analysis as an ongoing activity. (Recommendation, Paragraph 102)

The current state of the adult social care system is undermining the relationship building that is fundamental to the development of Integrated Care Systems (ICSs). Too much relies on local leadership, where often it feels that progress is made despite funding mechanisms rather than because of them. By maintaining a system which fosters disputes about money, the ability of ICSs to make the difference they were set up to make will be limited at best, and impossible at worst. (Conclusion, Paragraph 106)

We welcome the new objectives for the Better Care Fund to support preventative services, rather than simply focusing on solving challenges with hospital discharge. (Conclusion, Paragraph 111)

We recommend that the Government and the NHS review the structure and level of NHS investment in the Better Care Fund to ensure it is fully capable of meeting its renewed focused on upstream and preventative work. (Recommendation, Paragraph 112) 56

The Government will not succeed in creating an NHS fit for the future unless it effectively reforms the social care system. Social care reform is an integral part of NHS reform and cannot be a separate process. (Conclusion, Paragraph 117)

In her first report, Baroness Casey should set out the immediate steps that the Government needs to take to ensure the adult social care sector can play its vital part in the three shifts for NHS reform. Achieving these should be the measure against which the success of the 10-Year Health Plan is assessed. Her report should also set out how her reforms support the delivery of the 10-Year Health Plan and what, if any, further changes might be needed to the Plan or the NHS to support the adult social care sector. (Recommendation, Paragraph 118) Costs to the economy

The Government needs to fundamentally change how it views the social care sector, seeing it as an enabler and talking about it in those terms in the public debate - both for the invaluable service it provides to so many people and also as a driver of economic growth. We welcome recent positive words about the potential of the sector and hope that this marks the starting of a broader shift in the narrative. (Conclusion, Paragraph 130)

We recommend that the Government produce a growth strategy for the adult social care sector, including a focus on its potential to drive regional growth. This should be informed by a detailed study of how to improve productivity in the adult social care sector, which we recommend the Casey Commission carries out as part of its first phase. The growth strategy should also be accompanied by a joint announcement from the Department of Health and Social Care and the Treasury, telling a positive story about adult social care: what it can do for individuals who draw on its support and their families, and also what it can contribute to the rest of society and the economy. (Recommendation, Paragraph 131)

We recommend that the Government commissions research with the aim of fully quantifying the cost of doing nothing on adult social care reform. That research should seek to quantify costs to individuals, including unpaid carers and care workers, to local authorities, to care providers, to the NHS and to the economy. Cost is not just about money, it is also about non-monetary personal costs, including individual wellbeing across these specified groups. This research should be completed ahead of the final report of the Casey Commission, to enable a full cost-benefit analysis of 57 any recommendations she puts forward and to ensure that the Government can start building the public and political support it will need to guarantee the longevity of reform. The moral case for reform has never been stronger, but this must be accompanied by a robust financial case. Without this we fear that the reforms that come out of the Casey Commission will be doomed to failure, leaving everyone continuing to suffer under the current unsustainable system. (Recommendation, Paragraph 137) 58