Recommendation 2

HM Government Accepted

The 2021 Spending Review settlement considered a wide range of pressures facing social care. However, we recognise that since then there has been increased short-term pressure on local authorities’ ability to deliver adult social care, resulting from inflation and other factors. Therefore, at the Autumn Statement 2022 the government listened to the concerns of local authorities and made up to £7.5 billion of additional funding available over two years to support adult social care and discharge - with up to £2.8 billion available in 2023– 24 and up to £4.7 billion in 2024–25. Local authorities are expected to use the additional funding to go beyond meeting inflationary, wage and demographic pressures and to deliver tangible improvements in adult social care services, as outlined in the social care resources explanatory note. This increase in social care funding is part of an overall local government finance settlement (LGFS) which has grown in real terms in the last three spending reviews (2019–2024). Overall, the final LGFS for 2023–24 makes available up to £59.7 billion for local government in England, an increase in Core Spending Power of up to £5.1 billion or 9.4% in cash terms on 2022–23. The funding announced at Spending Review 2021 and the Autumn Statement follows a pattern of sustained government investment that has helped local authorities steadily increase their spending on adult social care, which reached £21.4 billion in 2021–22. This is an average increase of 2.5% per year in real terms between 2014–15 and 2021–22. The government further recognises the additional pressure that increases in energy bills is having on the sector. The Energy Bill Relief Scheme (EBRS) provided a discount on wholesale gas and electricity prices for all businesses and other non-domestic customers Government response 7 and applied to energy usage from 1 October 2022 to 31 March 2023. Further support will be provided via the Energy Bill Discount Scheme (EBDS), which following a review, has replaced the EBRS from 1 April 2023 until 31 March 2024. Under the new scheme, non- domestic consumers in Great Britain and Northern Ireland, including eligible care homes and other residential care settings, will continue to receive a per-unit discount to their energy bills. 8 Government response Adult social care funding Conclusion 4 to 6 – long term funding Conclusion 4 - The Rt Hon Boris Johnson MP said as Prime Minister that he would fix the crisis in social care once and for all. We commend the Government for attempting to prevent unpredictable and catastrophic care costs for people and introducing reforms to the sector where previous Governments failed to act. But it should be under no illusions that it has come close to rescuing social care and needs to be open with the public that there is a long way to go. Ultimately, all our lines of inquiry returned to the same fundamental point: there is a large funding gap in adult social care that needs filling. This is not new information. In October 2020, the Health and Social Care Committee estimated a funding gap of £7 billion to cover demographic changes, uplift staff pay in line with the National Minimum Wage, and to protect people who face catastrophic social care costs. We have not yet received an updated estimate of the funding gap to take into account immediate pressures and the Government’s various policy reforms. £7 billion was just a starting point and would not address the growing problem of unmet need nor improve access to care, with the full cost of adequate funding likely to run to tens of billions of pounds. Conclusion 5 - The covid-19 pandemic had the effect of raising public awareness of adult social care. It also achieved general support for a tax increase specifically to plug the longstanding funding gap. However, the Government has missed this opportunity. It has done so firstly by allocating the vast majority of the proceeds of its Health and Social Care Levy to the NHS, and secondly by in theory ringfencing what little funding it has allocated to adult social care for reforms rather than for cost pressures. Members of the public are seeing taxes on their payslips going to health and social care, yet we heard the money going to social care “won’t touch the sides”. Conclusion 6 - We do not wish to pit the NHS and adult social care against one another. The two systems are interdependent and each needs to be adequately funded to reduce pressure on the other.