Written evidence submitted by Councils (SCF0097)

Question 1: What impact is the current social care funding situation having on the NHS and on people who need social care?

Summary of Key Points

Our response covers a range of issues, we would however like to high light the following points: i. Future funding reform must recognise that local government has a key role not just to responding to the changes within the NHS but must be partners in co-creating future health and care services for the well-being of local communities. ii. Public health and prevention should become a core part of the way services are provided. Government should commit to fully fund prevention initiatives. iii. Despite the additional funding boosts that the adult social care sector has received over the past months, the sector is still facing unprecedented funding pressures. estimates that adult social care is facing a funding gap of between £120 -£130 million in 2020-2021 and it is estimated that this funding gap could be in the region of £600 million for by 2025. Government should address the identified funding gap and any new social care burdens. iv. There should be increased investment in local authority led adult social care. With increased investment, local authorities can deliver more cost-effective health and well-being outcomes for their communities, for example local authority success in reducing new HIV diagnoses across the capital is evidence of this. v. There should be increased investment in the adult social care workforce so as to create a social care workforce with better conditions and one that can meet the growing demand for services.

London Councils believes that there are core principles that should underlie any long-term funding reform. These include:

1. A system that is fair for all social care users across London: Access to support should be fair and based on needs without anyone being disadvantaged because of age, type of need, or location. 2. The sector should be reformed to ensure that it is financially sustainable and funding allocations to local government should be over the long term enabling long term planning similar to the ten-year funding allocation to the NHS. 3. Improve the flow of funding in the system: The flow of health and social care funding needs to be simplified so that money more easily follows the person from one part of the system to another. This will help improve the experience of people by offering seamless services. There should be establishment of enhanced pooled funding arrangements at a borough level to allow investment in shared priorities such as prevention and earlier intervention; and to enable the enhancement of the role of working with local VCSE partners including in social prescribing, mental health, supporting the shielded population and managing the wider determinants of health. London Councils represents London’s 32 borough councils and the . It is a cross party organisation that works on behalf of all its member authorities regardless of political persuasion.

We welcome the opportunity to submit written evidence to the Committee’s Inquiry into Social Care- Funding and Workforce requirements. Over the past few years it has become increasingly evident that the health and social care sector are highly interdependent. Challenges in the social care sector often result in problems on the health sector. Among the public, there is little distinction between health and adult social care. The important issue for many people is the need to receive a good seamless service regardless of who is providing the service. However, funding challenges in both sectors can mean that people do not receive a seamless service. For example, when a person is being discharged from hospital to their home, there is a clear interdependence between decision making to discharge and preparedness for providing care in the community. Poorly resourced adult social care sector can lead to delays in providing the right support quickly to people who are ready to leave hospitals – causing them to stay in hospital longer than they need to. A health and care system that is working efficiently has people flowing through the system from hospital to home or other forms of care without delays. However, delays continue and it is important to acknowledge that unnecessary time spent in hospitals can sometimes have a negative impact on the individual’s health outcomes. Long stays in hospital can also expose patients to a number of risks for example:  Exposure to picking up other infections  Losing mobility - research by Newton Europe found that a stay in hospital of over 10 days1 can lead to ten years of muscle ageing for some people who are most at risk like the elderly. The research also found that 35% of 70-year-old patients experience functional decline during hospital stays and are worse off than when they entered the hospital this increases to 65% in those over the age of 90 experiencing functional decline.  Losing continuity of care packages that may have been in place and can often increase longer term support needs  Longer stays can have an impact on the mental wellbeing of clients. Some of the delays in discharging people can be attributed to inadequacies in the care market due to the ongoing funding pressures that the social care market has faced over the past few years which have resulted in reductions in the number of care homes and home care providers that are available. When systems are financially challenged it can impact the system in various ways: 1. It can result in instability of the care market with increased closures of residential homes or homes giving back contracts to local authorities. 2. Inadequate capacity in the home care market to meet the demand to swiftly provide care to people being discharged back into their home. 3. Inability to recruit and retain sufficient staff further undermines the sector.

Not only do delays in transfer of care have the potential to negatively impact the health of people they are also very costly to the NHS. Better flow of patients between the NHS and adult social care reduces costs to the NHS. Using NICE costing analysis, London Councils analysed London’s delays in transfer of care and found that London boroughs had saved the NHS just under £750K per month per month in February 2019 compared to April 20172. If the adult social care sector was adequately funded it would result in a more resilient care market offering greater choice to services users and improvements in transfers, and a more efficient and financially sustainable NHS. Underfunding of adult social care has brought the sector to a point where it has little flexibilities in how it can either innovate or reform with its primary focus being on addressing immediate and current needs of services

1 https://www.england.nhs.uk/wp-content/uploads/2019/08/reducing-length-of-stay-action-card- therapist-v2.pdf 2 London Councils (2019) State of Adult social Care In London Report users at the expense of enabling longer term planning and investment in areas such as prevention. ADASS budget survey 2018 showed a clear link in reduction of social care funding and reduced investment in prevention3 . An increased focus on prevention can deliver the long-term reduction in upward demand that will make reform sustainable in the long term. Since the Care Act both health and social care have been under extreme pressure to meet the current demand and investing and planning for future demand has been a challenge for many areas. Public health and prevention should become a core part of the way services are provided. There should be a commitment from government to fully fund prevention initiatives. However, the public health grant has fallen by £55.8 million since 2015, the equivalent of 13% fall per Londoner. The capacity of Londoners to better self-manage their own care also needs to be fully harnessed and prevention needs to become the norm. People are capable of doing more to manage their own care particularly those with long term conditions and with support can play a key role in prevention helping to keep people healthier or delay the need for interventions for longer.

Question 2: What level of funding is required in each of the next five years to address this?

Since 2010-11 successive governments have focused on reducing the fiscal deficit. However, a combination of rising demand, rising costs in social care and increasing duties as a result of changes in social care policies and judicial reviews has meant that local government finances in particular adult social care departments have been facing unprecedented budgetary pressures. The scale of the funding crisis in adult social care (ASC) is such that even before the onset of Covid 19 it has required several major policy and funding interventions to help the sector. However, despite these additional funding boosts, this additional funding has still not fully met the funding gap in the sector. Adult social care continues to face a number of challenges arising from a combination of long-term public spending constraint, significant demographic growth and increased complexity of cases. Impact of COVID-19 Covid has disrupted health and care provision substantially and will shape the way people access and experience the health and care in the coming years in fundamental ways. Using the strong local knowledge that they hold, London boroughs have been in the forefront of innovation during the pandemic, whilst at the same time, using partnership arrangements already in place working more broadly together across the health and care sector to deliver cost effective services. Adult social care (ASC) has been acutely affected by the COVID-19 pandemic and the financial cost has been significant. MHCLG has undertaken monthly surveys since April to gauge the overall financial impact of the crisis on local government. The latest survey returns (from June) showed London boroughs estimate ASC spending from March to June had increased by £107 million as a result of the pandemic. The overall increase in 2020-21 is estimated to be £219 million - approximately 8% of total adult social care budgets. The overall financial impact of COVID-19 across London boroughs in 2020-21 is forecast to be £1.9 billion, comprising £1.1 billion in lost income and £767 million in increased expenditure. With boroughs receiving approximately £500 million from the first two tranches of emergency funding, the estimated funding gap is £1.4 billion for 2020-21. 3 ADASS Budget Survey (2018) https://www.adass.org.uk/media/6434/adass-budget-survey-report-2018.pdf 4 These estimates are based on varying assumptions about the length of the lockdown and extent of the pandemic. If, for example there is a “second spike” in the autumn as some have predicted, the financial impact could be even worse. The £219 million increase in adult social care spending therefore represents around a third of the overall increase in expenditure. However, this is likely to understate the overall impact, as boroughs also reported they expect £164 million of savings that had been planned will not now be achieved: it is estimated that around £60 million of these savings are likely to have been in adult social care4. Funding outlook Even before COVID-19, the immediate outlook for adult social care in London was difficult. In 2020-21, London boroughs plan to spend £2.6 billion on adult social care, and local authorities nationally plan to spend £17.7 billion. Across England, the LGA estimates that there is a £810 million funding gap in 2020-21. We estimate that London’s share of funding gap could be in the region of £120- £130 million in 2020-21. This gap is despite the Government providing a series of welcome funding interventions over the last four years. The Spending Review 2015 saw the addition of the ASC precept (for councils with ASC responsibilities) and the Improved Better Care Fund. However, the scale of demand for adult social care services led the Government to make six major funding interventions in three years, which included funding for the iBCF, continuing the ASCP and adding various separate grants, for example for Winter pressures. In total, an additional £3.7 billion was made available over the SR15 period (2016-17 to 2019-20), of which London boroughs received £475 million. Most recently, Spending Round 2019 confirmed all of these measures would continue for a further year in 2020- 21, with an additional £1 billion (£160 million in London) in grant funding for adult and children’s social care, and a further £574 million in ASC precept (£82 million in London). Prior to COVID-19, the LGA was predicting the funding gap would grow to £3.9 billion across England by 2025; London Councils estimates this could mean a gap in the region of £600 million for London boroughs by 2025. The impact of COVID-19 will have added to this challenge even further. It is clear, that significant and sustained investment is required in adult social care at Spending Review 2020 to prevent services from falling over. The work of local authorities impacts not just social care but wider health and wellbeing needs of communities. Increased investment in social care under local authority control would deliver more cost effective improvements for the health and well-being of residents. Even prior to the onset of Covid-19 the positive impact of London boroughs on health and wellbeing has been increasingly evident for example through the reduction of new HIV diagnoses across the capital.

Question 3: What is the extent of the current workforce shortages in social care, how will they change over the next five years and how do they need to be addressed?

The social care workforce is currently going through a challenging period characterised by high vacancy rates and difficulties in recruitment and retention of the workforce, particularly amongst regulated professions such as registered nurses, occupational therapists and social workers. Some of the causes for the high turnover rates are due to some of the conditions that characterise the sector for example, there are higher numbers of workers on zero-hour contracts and there limited opportunities for progression in the social care sector in comparison to the health sector. Skills for Care5 estimates that, in London, 9.3% of roles in adult social care were vacant, equivalent to 18,000 vacancies at any one time. The vacancy rate increased by 1.3 percentage points between 2012/13 and 2018/19. This rise in vacancies, in the context of a workforce that has grown at a slower rate in recent years, suggests that the sector is struggling to keep pace with demand as the population ages. Around 62% of the adult social care workforce in the London region was British, 14% had an EU nationality and 25% had a non-EU nationality. Therefore, on average, the adult social care sector in London had a greater reliance on non-EU, rather than EU, workers.

5 Skills for Care London Report (2019) https://www.skillsforcare.org.uk/adult-social-care-workforce-data/Workforce- intelligence/documents/Regional-reports/London-regional-report-2019.pdf At this stage it is currently unclear how the UK’s future skills-based immigration system and Brexit will impact the sector which makes up 38% of the workforce. The workforce in London is particularly challenged due to a number of factors including:  The higher cost of living and working in London  The higher cost of land has cost implications on the care provided  Due to the wide scale budget reductions that social care departments have made over the past few years invaluable staff knowledge and experience has been lost following restructures and redundancies resulting in an increasing overworked workforce. Steps should be taken to ensure that conditions in the care workforce are improved and comparable to the health workforce with similar benefits. This will help to address the challenges faced by the sector making recruitment and retention in the sector easier.

Question 4: What further reforms are needed to the social care funding system in the long term?

London Councils has long supported calls to reform adult social care and in particular the funding of adult social care. The current system must be simplified with clear roles and expectations set out for the state and the individual. Adult social care is one of the largest areas of spend for local government and the ongoing financial pressures compounded with the changing demographics have necessitated the need for transforming the long- term funding of adult social care. Addressing how social care should be paid for has become a pressing issue for the sector. Any future funding reform must recognise that local government has a key role not just to responding to the changes within the NHS, but must be partners in co-creating the future health and care services for the well-being of their communities. Long term reform of the sector must include governance structures that allow for effective collaboration between individual boroughs and the different spatial governance structures within the NHS.

Long term reform should ensure that local authorities continue to have on going local responsibility so that changes to regional and local governance structures continue to meet and deliver outcomes that meet local needs including local primary community and acute health services.

Core principles of long-term funding reform London Councils believes there are core principles that should underlie any long-term funding reform. These are: 1. A system that is fair for all social care users across London. Access to support should be fair and based on needs without anyone being disadvantaged because of age, type of need, or location. 2. The sector should be reformed to ensure that the sector is financially sustainable and funding allocations to local government should be over the long term enabling long term planning similar to the ten-year funding allocation to the NHS. 3. Funding reform should enable the sector to become more effective and responsive to the needs of Londoners. Services should be personalised and more efficient through integration of health and care services, delivering an improved experience for service users. 4. Ensure fair access to social care across the regions: Specific issues that should be taken into account for London are the significantly higher cost of living, lower home ownership rates, and severe deprivation. Disposable income and savings are often lower in London, impacting how much an individual is able to pay towards their care. 5. Taking account of changing demographics: Any new funding system should take into account the projected growth and changes in demographics. London is expected to face higher levels of growth among key groups of adult social care users, such as adults of working age with learning and/or physical disabilities. 6. Improve the flow of funding in the system: The flow of social care funding needs to be simplified so that money more easily follows the person from one part of the system to another. This will help improve the experience of people by offering seamless services. There should be establishment of enhanced pooled funding arrangements at a borough level to allow investment in shared priorities such as prevention and earlier intervention; and to enable the enhancement of the role of working with local VCSE partners including in social prescribing, mental health, supporting the shielded population and managing the wider determinants of health. However, while a commitment to sustainable funding is needed, the transformation of adult social care goes beyond the issue of just additional investment. Successful transformation requires change across different parts of the health and care system. It must break down the barriers between health and care provision, ensuring that people receive an integrated service focused on their individual needs – enabling them to live in comfort, dignity, and good health for as long as possible. A key question of the social care reform process will be how close policy-makers, and the public, want NHS and social care services to become. Integration of health and care is gathering momentum and local areas are doing their best to set up systems and structures that will enable health and care to work in a more integrated way - with varied levels of success. Long term reform offers an opportunity to further drive integration through a transformed BCF or other system for integration. To do this there must be some principles for areas in delivering integrated services whether at the local or sub regional levels. These principles could include: i. There should be no cost shunting between the health system and local government. Focus should not be on individual organisational savings but on the care and support being provided regardless of which part of the system this is coming from. ii. The money must follow the person through the system to ensure they receive continued seamless service from both health and care. Services should be focused on the service user and must address and measure outcomes that are important to patients and service users as the focus of any new services. iii. There should be joint governance over both health and care that has democratic accountability to the public.

Sept 2020