Social care reform could cost more than government estimates, report warns

The cost of government social care reforms could be £10bn higher than estimated and could create a further workforce crisis, a new report reveals.

The report, Preparing for Reform, released by the County Councils Network (CCN) and Newton, provides the first independent analysis of the reforms, which include a more generous means-test, a £86,000 cap on care costs, a fair cost of care and enabling people who arrange and fund their own care to ask their local authority to do it on their behalf.

According to the report, rolling out these reforms could cost local authorities in England a minimum of £25.5bn. This is nearly £10bn more than the government's estimates.

Whilst it welcomes government ambitions to reform the care sector, Care England warns that without urgent central intervention and funding, these reforms will be “the straw which breaks the camel’s back”.

Professor Martin Green, chief executive of Care England, says: “Today’s report demonstrates that the government has significantly underestimated the funding required by a phenomenal amount. The consequence of which is that the sector will face further additional financial pressures, on an already overburdened sector.”

The report also found an extra 4,300 social work staff will be required to carry out the additional Care Act assessments, reviews, and case management, on top of a current vacancy rate of 1,782, and an additional 700 financial assessment officers will be necessary.

Professor Green added: “The outcome of this report demonstrates Care England’s argument the current funds allocated to social care reform are grossly inadequate is accurate and reflective of the reality of the current situation the care sector is in.

“The government must address these findings and commit to providing additional financial resources to see these reforms to fruition to secure a sustainable and financially viable care sector for the future.”

The report shows there is also a significant regional variation in the costs of implementing the reforms, with councils in county and rural areas being disproportionately impacted. Councils in county and rural areas could face the biggest financial and workforce challenges.

'The government must fully fund these reforms'

Cllr Martin Tett, adult social care spokesperson for the County Councils Network, said: “[The] report shows there is a significant financial and operational cost to these reforms, which are likely to be significantly more than the government’s estimates. We urge ministers to clearly examine these findings, which show costs are likely to be higher than the government is forecasting, and potentially devastatingly so in some regions.

“Local authorities are also facing a mountain of extra assessments required for the thousands of people who will approach their local authority to benefit from the reforms and it will be almost impossible to recruit the extra staff required.

“Therefore, the government must fully fund these reforms, incorporating the substantial extra cost they are likely to generate for councils, so we are able to set balanced budgets in the future. Importantly, instead of a big bang introduction to the reforms, today’s report calls for them to be phased to give local authorities enough time to mitigate the challenges and give them enough time to transform and prepare for such a momentous change.”

Councils in rural England, predominantly in the South, East and West of England, will account for the 64 per cent of the total cost of the means test and cap on care costs over the next decade and could face a £7.6bn funding deficit.

The South East faces a potential minimum funding shortfall of £3.8bn, the East of England £1.7bn, the North West £1.6bn and the South West £1.3bn.

Cost estimates in CCN report are simplified, says DHSC

In response to the report, the Department of Health and Social Care (DHSC) say they recognise the charging reforms will place additional costs on local authorities and it is intending to consult on how it allocates the funding for these costs later this year.

It also claims the cost estimates in the CCN and Newton report are simplified and do not adequately take into account the variation in the real world, such as care settings.

A DHSC spokesperson said: "Our charging reforms will mean no one will have to face unpredictable care costs and we are investing £5.4billion over the next three years, including funding for local authorities, to implement them.

“Modelling has been through extensive peer review and we are confident in the department’s estimate for charging reform.

“We’re working closely with local authorities, providers and care receivers to deliver a smooth national transition into the new system, including learning from our trailblazer local authorities.”

To read the report in full, go to https://futureasc.com/reform