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How is social care funded?

Who pays for social care?

People in need of social care are required to undertake a needs or eligibility assessment at their local authority social services department. This determines what type of services they might need or be entitled to.

Social care services are often means-tested (assessed based on how much care the person needs and their finances), so how support is funded varies from person to person. Currently (Sept 2018), if someone has less than £14,250 in savings, their council will pay for them to be supported. People with savings of up to £23,250 are likely to be eligible to have some of their care paid for, while those with more than £23,250 in savings have to fund their care privately.

However, most adults with learning disabilities are not self-funders. Means-testing based on savings usually only applies to older people, while adults with learning disabilities are normally funded by their local authority.

Social care services overall are funded by a mixture of local authorities and self-funders. For learning disability services, provision is almost 100% funded by local authorities. 85% of learning disability services are delivered by independent providers – both for-profit companies, as well as charities and not-for-profits (such as Hft).

The money used to pay for someone’s social care is called a personal budget. A personal budget can be managed by the local authority, which might commission services for the person. But it can also take the form of an individual service fund, where the personal budget is managed by an alternative provider. Personal budgets can also be given as direct payments. In this instance, the supported person gets to decide how to commission their care. This means they can either pay providers like Hft for services, or pay a wage to a family carer to support them.

Where do councils get money to pay for social care?

Councils in England fund their social care services using money from:-

  • Council tax (some of which comes via the ‘social care precept’ – an extra percentage of council tax earmarked for social care) and local business rates.
  • Central government funding. However, central government is reducing the amount that it gives to local authorities, hoping to make them self-sufficient by 2020.
  • Private funding from people responsible for paying for their own care. This is determined using means-testing.
  • Income from the NHS (for services that the NHS is responsible for funding).

Is the amount of social care funding sufficient? Is there an issue with funding?

The National Audit Office reports that government funding for local authorities has fallen by an estimated 28.6% from 2010-11 to 2017-18 in ‘real terms’ (with the addition of council tax).

In 2016, Hft published a report which concluded that, without additional funding to meet the rising costs of the sector, 10% of the learning disabilities sector’s workforce could disappear.

Our research found that:

  • The National Living Wage (NLW) will add an extra £460million to wage bills in the learning disability care sector by 2020.
  • The social care sector has a high proportion of staff aged over 25, meaning it is more adversely affected by the NLW due to its older workforce.
  •  In order to just break even, a funding increase of at least five percent per year is needed.
  • Of the providers surveyed who responded, more than half (55%) will be running into deficit within three years without additional funding.
  • In response to cost pressures, a third of providers surveyed had already cut back on staff, while just under half (48%) had started to curb future investment.

In a follow up survey in 2017, we found that the number of providers in the learning disability sector operating at a loss had more than trebled since 2016/17, increasing from 11% to 34%.

Since February 2016, Hft has run the It Doesn’t Add Up campaign, which aims to raise awareness of the financial pressures facing the learning disability sector. We are working proactively with government and local authorities in order to help ensure a sustainable funding future for the sector.

What is the future of social care funding?

The Department for Health and Social Care is due to publish its long awaited Green Paper on the future of adult social care funding in autumn 2018.

In it, the government will reportedly put forward several proposals for the future of funding for adult social care, including a ‘Care ISA’, which would see people save during their working lives to pay for any care they may need in later life.

Hft will be submitting evidence to this consultation to argue for a sustainable funding solution that includes adults with learning disabilities, as well as elderly care.

Where can I find out more about social care funding?

The National Audit Office has recently published a useful updated report highlighting key trends, pressures and developments in the social care sector.