Reforming adult social care in England

We remain unconvinced as to whether the Department knows if it is achieving value for money from the additional funding going to adult social care. Recent funding for adult social care includes short-term, top-up pots of money in response to crises. In response to emerging pressures in 2022, government awarded £1.6 billion to help speed up hospital discharge through the Better Care Fund and £1.1 billion new grant funding to local authorities through the Market Sustainability and Improvement Fund (MSIF). It is troubling that, though MSIF funding is intended to support “tangible improvements” in adult social care, the Department did not quantify by how much the funding has contributed to its three objectives of increased staff pay, increased fee rates paid to providers or reduced waiting times. It remains to be seen whether the new CQC inspection regime, and promised improvements in local commissioning, can provide better assurance that top-up funding is not simply going into provider profits. We are concerned that the Department’s grasp of what it is getting for the £1.6 billion funding to support hospital discharge, is similarly vague. Although ‘supported discharges’ (the number of people being discharged from hospital with a package of care) may well have increased as a result of this funding, it is far from clear whether this represented good value compared with other interventions. Recommendation 2: The Department should write to the Committee alongside its Treasury Minute response to set out how it is assuring itself that each additional fund aimed at supporting adult social care is achieving value for money, including on benefits in relation to costs, for example: 6 Reforming adult social care in England • how much additional capacity it has bought with the discharge funding through the Better Care Fund. • how it will ascertain whether funding for market sustainability and improvement has not just ended up increasing provider profit margins.

Local authorities are having to plan and commission adult social care services against a backdrop of fragmented and uncertain funding. We have long voiced our frustration at the short-term and multiple funding pots provided to local government and recommended that government explore ways to provide more confidence over long-term funding. We note that funding announced for adult social care in 2022 covered 2023–24 and 2024–25, yet we remain concerned at the perpetual late announcement of overall funding for local government. We welcome the additional funding for adult social care in recent years but recognise these are short-term top-ups, often designed to be spent on specific initiatives (such as increasing pay to providers) with no guarantee that they will continue. The latest government announcement of an additional £500 million for adult and children’s social care is welcome but comes just weeks before the next financial year is due to begin and may be too little, too late to have a demonstrable impact. Patchwork funding and short-notice announcements hinder the sector’s ability to plan for the long-term and risks undermining delivery of the Department’s 10-year vision for adult social care. Funding for adult social care, including supporting the planned reforms, for 2025–26 onwards will depend on the next spending review. Recommendation 3: Given it has a 10-year vision for reforming adult social care, in its Treasury Minute response, the Department should set out: i) what it is doing now to prepare for the next spending review and make the case for more stable funding, and ii) what it can do to give local authorities greater certainty over funding and allow them to plan for the longer term.

Notwithstanding its recent efforts to make adult social care a more attractive career, the Department has still not produced a convincing plan to address the chronic staff shortages in the long-term. Workforce vacancies in adult social remain worryingly high with some places, such as rural areas, particularly affected. In 2022–23, workforce vacancies exceeded 152,000 (9.9% vacancy rate) despite overseas recruitment of 70,000 staff. Proposed visa restrictions and risks of exploitation raise significant questions about the Department’s reliance on overseas staff in future. Given these significant challenges and numerous, repeated calls for a workforce strategy, we find the white paper’s coverage of the workforce woefully insufficient to the scale of the task. It does not tackle all the significant factors impacting recruitment and retention. For example, there is scant detail on pay. Neither does the white paper provide detail on workforce plans beyond 2025 despite the Department’s forecasts that the number of adult social care jobs will grow by almost one-third by 2035. Once again, we see one approach for the NHS and another for adult social care. While we welcome the Department’s plans to professionalise the workforce, it falls short on providing leadership on pay and ensuring parity of esteem with equivalent NHS roles. Reforming adult social care in England 7 Recommendation 4: In the absence of an NHS style workforce plan, alongside its Treasury Minute response, the Department should write to the Committee setting out how it will lead the sector to identify and address workforce challenges, including: • achieving a sustained reduction in the number of vacancies in the sector (beyond 2025) • addressing the challenges and risks associated with international recruitment • tackling local variations in vacancy rates • addressing issues around disparity with NHS pay • assessing which workforce initiatives are most effective for recruiting and retaining staff.

Long-awaited workforce reforms are way behind schedule and too dependent on a ‘novel’ payment system. We welcome the Department’s launch of the care workforce pathway, which aims to provide consistent career progression for those working in the sector, but we are concerned at the lack of progress on other workforce reforms. At £265 million, they make up the largest budget in the scaled-back system reform portfolio (£729 million). It is alarming that many workforce projects are behind schedule because they depend on delivery of a bespoke payments system to pay suppliers directly. These include the Department’s project to increase the number of regulated professionals and the £136 million flagship project to improve workforce training, originally planned for September 2023. Although the Department assures us that its decision to build a bespoke system was well-evidenced, this ‘difficult’, ‘complex’ and ‘novel’ project is creating a worrying bottleneck and the Department acknowledges that the target date of summer 2024 is already at risk. Recommendation 5: The Department should in its Treasury Minute response to this report: • confirm which of the workforce reform projects depend on this payments system and update us on progress with each; and • update the Committee on progress with the payments system (including any updates to the RAG rating and implementation date) and when it expects the workforce initiatives that depend on it to start to have an impact.

The Department faces significant challenges in delivering its ‘vision’ for adult social care reform, and Parliament and the sector must be able to hold it to account for its progress. It is worrying that the Department has no roadmap for achieving its 10-year vision for adult social care, or any targets or milestones beyond 2025. Though we agree that some flexibility to adapt as the Department learns has merit, there is currently nothing meaningful in place to demonstrate progress towards targets. With charging reform postponed, system reform scaled back and limited progress from the Department even on its reduced ambition for system reform, we cannot help but be sceptical as to whether the vision is still achievable. The 8 Reforming adult social care in England Department has given us little assurance that charging reform, delayed to October 2025, can be delivered on schedule; work will need to start soon but funding for it will depend on the next spending review. We are encouraged that the Department says it is monitoring local authorities’ capacity to deliver charging reform alongside system reform and other departmental initiatives but somewhat concerned that it is not yet sequencing activity to alleviate pressure. Recommendation 6: The Department should set out a roadmap for delivering its vision, pulling together all its reform activity (system reform and charging reform), and the risks to delivery with key performance indicators and should publish six-monthly updates on progress to time and budget. Reforming adult social care in England 9 1 Funding and delivery structures for adult social care

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health and Social Care (the Department) and from the Department for Levelling Up, Housing and Communities (DLUHC) about progress in reforming adult social care in England.1

When we pointed out that it was not always the case that social care got the right weighting in ICS structures because they are health-led, the Department acknowledged that the system was not working everywhere.10 The National Care Forum called for the appointment of adult social care leads on all Integrated Care Boards (statutory bodies that are responsible for planning and funding most NHS services in an area) to correct the tendency for everything to be viewed solely through a healthcare lens, noting that the voice of adult social care providers and people accessing care and support was often overlooked.11 Likewise, the County Councils Network (CCN) expressed its concerns that the structure of ICSs meant that key decision-making powers lay with the NHS, and that local government had limited representation on Integrated Care Boards. This, explained the CCN, meant that although joint decision-making can take place, it is not guaranteed that monies distributed by these means will always be allocated to social care. CCN also queried whether Integrated Care Board officials really understood how joint funding should be spent and the risk that it might be absorbed into spending on acute health pressures.12 6 Committee of Public Accounts, Introducing Integrated Care Systems, Thirty-Fifth Report of Session 2022– 23, HC 47, 23 January 2023 7 Committee of Public Accounts, Introducing Integrated Care Systems, Thirty-Fifth Report of Session 2022–23, HC 47, 23 January 2023 8 Department of Health and Social Care, Government response to the Committee of Public Accounts on the Thirty fifth report from Session 2022–23, 12 April 2023 9 Q 19 10 Q 20 11 RSE0004 12 RSE0031 Reforming adult social care in England 11

We asked the Department about how it was measuring the effectiveness of joint working between health and social care in delivering better outcomes for the people they served. We heard that CQC inspections, which were now measuring systems as well as institutions, and a “colossal improvement” in data gave the Department a lot more information than it had had before the COVID-19 pandemic. For example, the Department told us that the metrics it was tracking around the number of care packages and hospital discharge, such as how many discharged patients returned to hospital within 90 days, were the real key performance indicators (KPIs) on how the system was working.13 We shared our concerns that there seemed to be no strategy for pulling together these data and KPIs from across the sector and then publishing it and making it accessible. The Department insisted that CQC inspection was providing transparency and that it published a lot of data.14 We acknowledged that there may be more data published and that aggregate data may be available to the Department and to CQC. However, we challenged on how easy it was for members of the public or MPs to understand this data and use it to compare their area with another comparable area, as it had been with Primary Care Trusts.15 The Department provided written evidence after the session to explain the data it publishes on outcomes for ICSs. However very few, if any, of these metrics directly relate to social care, and it is not clear if ICS performance against these metrics is published. The Department also highlighted that there are specific metrics for integrated care in the Better Care Fund Policy Framework 2023–25, but these are only used to set “ambitions” for local systems, without an assessment of whether or not they were achieved.16 Additional funding for adult social care

In recent years, there have been multiple short-term, top-up funding announcements for adult social care in response to crises. In response to emerging pressures in 2022, in the November 2022 Autumn Statement government announced funding of up to £7.5 billion over two years (up to £2.8 billion in 2023–24 and up to £4.7 billion in 2024–25) to help stabilise the care sector. This included £2.7 billion of new grant funding: £1.6 billion through the existing Better Care Fund to support hospital discharge and £1.1 billion to local authorities through a new Market Sustainability and Improvement Fund (MSIF) for local authorities to support “tangible improvements” in adult social care.17 Further top-up funding during 2023 included £570 million for the Market Sustainability and Improvement Workforce Fund, and £30 million for urgent and emergency care, announced in July, with a further £10 million top-up for urgent and emergency care announced in September.18

When we asked what the Autumn Statement funding had delivered, the Department told us it had achieved “an awful lot” but acknowledged this was not as much as it had wanted and there was more to come. The Department did not quantify how much the MSIF funding had contributed to its three objectives of increased staff pay, increased fee rates paid to providers, or reduced waiting times.19 The Department told us that 85% of local authorities had said they planned to use the money on fee rates and that “a lot” of local authorities had said that average fee rates had gone up by 8.9%, noting that this was 13 Qq 22, 23 14 Qq 25–27 15 Qq 29–31 16 Letter from DHSC to Committee, 1 February 2024 17 Q 10; C&AG’s Report, para 2.7 18 C&AG’s Report, para 2.18 19 C&AG’s Report, para 2.7 12 Reforming adult social care in England above inflation. We heard that, as 70% of care provider spending goes on the workforce, this was a way of putting money into the workforce.20 Yet some care providers were more sceptical about the effectiveness of this top-up funding especially with further increases in the national living wage to come. For example, Care England reported that 84% of care providers said that government funding measures such as MSIF had had ‘no impact’ on their financial sustainability in 2023.21 Bupa Global & UK said that when engaging with local authorities it had become apparent that much of the Market Sustainability and Improvement Workforce Fund, which has similar requirements to MSIF, had been absorbed into central local authority costs, rather than being passed on to providers.22 The Local Government Association noted that much of the additional funding would go on meeting pay and inflationary pressures due to the sector’s higher exposure to costs associated with pay, energy, food and fuel prices.23

We asked about the risk of profiteering and how the Department was ensuring that the money it was putting into the system was going to the right places. The Department explained that was mainly down to the quality of commissioning and that, as CQC was now inspecting local authority commissioning, it would be getting an overview of how good that commissioning is. DLUHC told us that local authorities were responsible for ensuring that their local markets are working functionally and that they can continue to commission care. The Department pointed out that, as shown in the NAO’s report, provider profits were falling, and said it did not therefore consider there to be a particular risk of providers “creaming off profits”. It said that profits in social care were to be made more on the self-funder side than on local government funded care.24

With regard to additional funding for hospital discharge—£600 million in 2023– 24 and £1 billion in 2024–25—the Department told us that delayed discharges had been consistently lower over the last 6 months than the previous year despite an increase in emergency admissions. The Department said that the best measure of whether money had been well spent was “supported discharges” – the number of people being discharged with a package of social care or community care. We heard that supported discharges were 17% higher at the end of December 2023 than December 2022.25 In written evidence, Mencap cautioned that one-off discharge funds like this do not tackle the systemic funding issues facing social care.26

Other evidence we received put forward alternative ways of taking pressure off the NHS and other parts of the public sector, that might offer better value for money. For example, the National Care Forum suggested that measures to enable a shift towards prevention and early intervention, rather than a narrower focus on hospital discharge of older adults to deal with NHS backlogs, could unlock benefits for people of all ages and a range of conditions and life situations.27 The Challenging Behaviour Foundation 20 Q 12 21 RSE0003 22 RSE0023 23 RSE0027 24 Q 55; C&AG’s Report, para 1.10 25 Q 12 26 RSE0005 27 RSE0004 Reforming adult social care in England 13 suggested that better community provision for people with learning difficulties could prevent unnecessary admission to NHS funded inpatient units and speed up discharge of people with learning difficulties.28

We noted that reform funding, including the £300 million budget to integrate housing into local and care strategies, had been redirected to support the system and asked what the consequences of that reprioritisation had been.29 Both the Department and DLUHC acknowledged the redirection of money from supported housing, and the Department told us that taking out the budget to integrate housing had been a ministerial decision. DLUHC went on to highlight the close cross-departmental working on housing; investment in affordable housing, which, it explained, would also benefit supported housing; and legislation designed to improve supported housing oversight.30 Fragmented and uncertain funding

We have reported before on the prevalence of short-term, one-off funding for local authorities and recommended that government explore ways to provide greater confidence over long-term funding.31 With regard to adult social care, this lack of financial certainty has constrained local authorities’ and providers’ ability to plan for the longer term, and caused investment in areas such as staff training, new accommodation and technological innovation to suffer.32 Local authorities have continued to report financial pressures and last year just under one-fifth of directors responsible for social care reported they were not confident they could meet their statutory duties for care in 2024–25.33 The Association of Directors of Adult Social Services (ADASS) reported that one-year funding settlements for local government, supplemented by short-term and targeted grant funding for adult social care, meant that the conditions and certainty have not been there for councils or providers to embark on multi-year investment programmes to fundamentally transform the services they offer.34

We asked about the local government finance settlement for 2024–25, noting that the longer the settlement is delayed, the more difficult it is for local authorities to prepare their budgets. DLUHC told us that in 2022 it had set out a policy statement that outlined not only the settlement for 2023–24 but also the outlines and main grants for 2024–25. The draft local government settlement for 2024–25 was, however, only published in full in December 2023, and did not include any provision for the update in the minimum wage announced in the autumn statement.35 A £600 million increase to this settlement, including £500 million for adult and children’s social care, was announced during our evidence session, but the final settlement was not confirmed until early February 2024.36 28 RSE0014, 29 Qq 10, 56–60 30 Qq 58–60 31 Committee of Public Accounts: Alcohol treatment services, Fifty-Fourth Report of Session 2022–23, HC 1001, 24 May 2023; and Reducing the harm from illegal drugs, Eleventh Report of Session 2023–24, HC 72, 9 February 2024 32 Committee of Public Accounts, Adult Social Care Markets, Seventh Report of Session 2021–22, HC 252, 16 June 2021 33 C&AG’s Report, para 7 34 RSE0013 35 Qq 3–5 36 Qq 107–115; Department for Levelling Up, Housing and Communities, Final local government finance settlement: England, 2024 to 2025, 5 February 2024 14 Reforming adult social care in England

We challenged the Department on whether we were ever going to see a multi-year funding settlement for local government and if the extra money for adult social care in 2023–24 and 2024–25 would continue into future years. Both the Department and DLUHC acknowledged the benefits of multi-year funding but also the potential downsides if circumstances are volatile, such as high inflation. The Department told us that this would be a matter for the next spending review, of which the timing was not yet known, and decisions government takes, but that the Department would cope with whether it was a multi-year settlement or a one-year rollover.37 37 Qq 86–91 Reforming adult social care in England 15 2 Delivering adult social care reforms Planning for long-term workforce needs

We have repeatedly raised concerns about care workforce shortages. When we reported in 2018, vacancy rates for 2016–17 were 6.6%.38 The vacancy rate has increased since then and, as the NAO reported, in 2022–23 vacancies were 152,000, a rate of 9.9%, despite the recruitment of 70,000 staff from overseas. We observed that, although this was lower than the high point of 2021–22, when reported vacancies reached 164,000, this was still way off the 60,000 from 2012–13.39 The Department agreed that vacancies were too high but assured us that things were improving. We heard that monthly figures for November 2023 showed a vacancy rate of 8.4% but the Department acknowledged that these were not as robust as the annual figures.40 When we highlighted regional variation, the Department agreed that rural areas were undoubtedly worse affected and that addressing geographical disparities was a high priority for both its staff and local authorities. The Department noted the challenge that as more young people live in cities and more elderly people live in rural and coastal areas, demand was higher in rural areas but the people to deliver care were in the cities.41

In its 2021 white paper, the Department said it expected the number of jobs in adult social care to increase by almost one-third by 2035.42 Given its reliance on overseas workers to date, we asked what percentage of the workforce it expected to come from overseas in future. The Department told us that it did not do workforce planning in this way because it was not a public sector workforce but rather a private sector workforce with 18,000 employers.43 We asked whether recent changes in Home Office visa policies that restrict overseas workers from bringing dependents might have an impact on the sector’s ability to recruit from overseas. The Department assured us that it expected to be able to carry on recruiting internationally for people without dependents.44 We also asked about the risks of exploitation and modern slavery through the care sector. For example, the charity Unseen UK reported that its anti-modern slavery and exploitation helpline had seen a 606% increase in care sector cases from 2021 to 2022, and that it expected cases in 2023 to exceed 130. The Department told us that, while it does not have a statutory responsibility for the issue, it recognises the concern, and that it was working with other organisations to minimise the issue.45

Given the significant workforce challenges facing the sector, we asked the Department why it had not produced a workforce strategy, despite repeated calls from the sector and our previous recommendations.46 It told us that it considered the workforce chapter of its 38 Committee of Public Accounts, The adult social care workforce in England, Thirty-Eighth Report of Session 2017–19, HC 690, 9 May 2018; Comptroller and Auditor General, The adult social care workforce in England, Session 2017–19, HC 714, National Audit Office, 8 February 2018 39 Q 34; C&AG’s Report, para 1.8, Figure 2 40 Qq 16, 33, 34; C&AG’s Report, para 1.8 41 Q 17 42 Department Health and Social Care, People at the Heart of Care: Adult Social Care Reform White Paper, December 2021, white paper, CP 560 43 Q 44 44 Q 46 45 Qq 39–43; RSE0021 46 Q 47; Committee of Public Accounts, Adult Social Care Markets, Seventh Report of Session 2021–22, HC 252, 16 June 2021 16 Reforming adult social care in England white paper to be its workforce strategy, and that it would not be possible to create a strategy similar to that produced for the NHS, as the Department is not the employer of the adult social care workforce.47 The chapter did not set out any detail on plans beyond 2025 and in our view is more a series of high level statements and aspirations.48 We heard from some in the sector, such as Bupa Global & UK, that, while they recognised the importance of creating improved career pathways for the adult social care workforce, the white paper fell short of addressing other key factors affecting recruitment and retention.49 The Nuffield Trust, in written evidence, said the white paper’s efforts “did not amount to a long-term strategy” and described the failure to address low pay as “striking”. It said that its research into workforce reform in other countries identified unintended consequences when moving towards greater recognition and professionalisation without accompanied pay increases.50 Although we acknowledg

Care England said there was a widespread sense within the sector that careers in adult social care did not enjoy parity of esteem with the NHS and care workers were not afforded the same level of respect from the Government or across wider society.52 Pay for equivalent roles in adult social care is also lower than in the NHS and Community Integrated Care has reported that it could take more than 20 years before the pay gap is closed.53 Delivering workforce reforms

We welcomed the Department’s introduction of a new framework aimed at providing consistent career progression for the social care workforce (the Care Workforce Pathway) in January this year.54 However, we challenged the Department on why it had made so little progress overall on its workforce reforms which, even after scaling back, make up £265 million of the £729 million remaining for system reform.55 The Department told us that nearly all the budget goes on training and explained that these training initiatives were, in turn, dependent on the development of a bespoke new payments platform to pay suppliers directly.56 This includes the £136 million project for improving workforce training and development, originally planned for launch in September 2023, and the project to increase the number of regulated professionals, against which there was zero spend in 2022–23.57

The Department explained that it had chosen a new payments system because it would be making payments on a scale not dealt with before and had wanted a proper way 47 Q 47 48 Department Health and Social Care, People at the Heart of Care: Adult Social Care Reform White Paper, December 2021, white paper, CP 560 49 RSE0023 50 RSE0024 51 Q 49 52 RSE0003 53 RSE0007 54 Qq 49, 50 55 Q 64; C&AG’s Report, Figure 7 56 Qq 64–70 57 Q 65; C&AG’s Report, paras 15, 3.11, Figure 7 Reforming adult social care in England 17 to guard against fraud risk, and assess and process requests that came in.58 We challenged the Department on why it had not simply routed payments through local authorities, given they have good existing connections to providers. The Department told us that not all providers had relationships with local authorities which, it said, had been a problem during the pandemic for getting money directly to providers. It assured us that the business case would have looked at all the different options and that having a direct route to providers had “an efficiency to it” and would provide an option to do that in future, should it be needed.59 In written evidence provided after the session the Department confirmed that it had selected a new digital platform by the NHS Business Services Authority as the preferred option in part because local authorities did not have direct relationships with all care providers in their areas. Other reasons cited were to avoid the potential for inconsistencies in approach to training and distribution of funding, and to make it easier to collect data on the value for money of the training.60

When asked when the payments system would be ready, the Department told us that it was aiming for summer 2024 but that delivery was “at risk”. The Department described the system as “difficult”, “complex” and “novel” which, we noted, sent “chills down our spine”.61 The Department has since confirmed that the payments system is rated ‘amber’, meaning that successful delivery is feasible but there are still significant issues that the Department is addressing.62 Assessing progress with reforms

The NAO reported that the 2021 white paper set a 10-year ‘vision’ for transforming adult social care, but that the Department had no long-term funded plan for achieving it and no milestones beyond the end of the current Spending Review period, March

We challenged the Department on how it was applying lessons from its earlier attempt at charging reform to meet the revised implementation date of October 2025. The Department told us that charging reform was “not a delivery challenge; it was a money challenge”, and that was why it delayed it and redirected the money from charging reform into the system. The Department assured us it had been ready to deliver, and it 58 Q 64 59 Qq 75–78 60 Letter from DHSC to the Committee of Public Accounts, 1 February 2024 61 Qq 66–68 62 Letter from DHSC to the Committee of Public Accounts, 1 February 2024 63 C&AG’s Report, paras 3.2, 3.8 64 C&AG’s Report, para 17, Qq 63 65 Qq 11, 63 66 Q 63 18 Reforming adult social care in England had learned a lot from the six trailblazer local authorities. It told us about the innovative ways that the trailblazers had discovered to get through more care needs assessments, for example, using online digital technology and having different mixes of teams rather than relying on a social worker. We heard that one of the trailblazers made a 40% productivity improvement through those approaches.67 As the NAO’s report pointed out, to achieve the revised timetable, work would need to begin soon yet the funding set aside for charging reform has been diverted elsewhere and the levy to support it dropped.68 When we asked about how it would fund charging reform, the Department told us that the funding and the timetable for the next spending review were questions for the next spending review.69

We asked the Department and DLUHC what they were doing to ensure that local authorities could deliver charging reform alongside system reform, with all the other pressures on them. The Department told us one of the reasons for delaying charging reform had been local authority capacity given other pressures on them and that, before giving a new chunk of complicated work alongside all the other things they had to do, it would want to be sure they could do it well.70 DLUHC told us that it was working closely with local authorities to ensure they had capacity do all the critical things going through them, including reforms to children’s services which it said was also a major system reform. We heard that all these programmes were at different stages of development and that DLUHC was working with local authorities to make progress on things like quality and productivity but was not currently sequencing reforms with local authorities to address local pressures and priorities.71 67 Q 79 68 C&AG’s Report, para 3.14 69 Q 80 70 Q 82 71 Qq 82, 95–97 Reforming adult social care in England 19