Chancellor Announces £2.8bn Social Care Funding Increase Next Year

Chancellor Jeremy Hunt announced in today’s Autumn budget that he is to increase the NHS budget over the next two years by an extra £3.3 billion, and also announced an increase in funding for the social care sector of up to £2.8 billion next year and £4.7 billion the following year.

Speaking in the Commons Mr Hunt said: “That is why today we commit to a record £8 billion package for our health and social care system – a Conservative government putting the NHS first.”

He said the NHS will be asked to “join all public services in tackling waste and inefficiency”.

He added: “We want Scandinavian quality alongside Singaporean efficiency. Both better outcomes for citizens and better value for taxpayers.

“That does not mean asking people on the frontline – often exhausted and burnout – to work harder, which would not be possible or fair. But it does mean asking challenging questions about how to reform all our public services for the better.”

Mr Hunt also confirmed that the measures set out in the Dilnot Report will be delayed for two years to give councils breathing space to increase social care spending.

“I have also listened to extensive representations about the challenges facing the social care sector. It did a heroic job looking after children, disabled adults, and older people during the pandemic.”

“Its 1.6 million employees work incredibly hard. But even outside the pandemic, the increasing number of over 80s is putting massive pressure on their services.”

Dilnot Reform Delay

“I also heard the very real concerns from local authorities about their ability to deliver the Dilnot reforms immediately, so will delay the implementation of this important reform for two years, allocating the funding to allow local authorities to provide more care packages.”

“I also want the social care system to help free up some of the 13,500 hospital beds that are occupied by those who should be at home.”

“I have therefore decided to allocate for adult social care additional grant funding of £1 billion next year and £1.7 billion the year after.”

“Combined with the savings from the delayed Dilnot reforms and more council tax flexibilities, this means an increase in funding available for the social care sector of up to £2.8 billion next year and £4.7 billion the year after.”

“How we look after our most vulnerable citizens is not just a practical issue but speaks to our values as a society, so today’s increase in funding will allow the social care system to help deliver an estimated 200,000 more care packages over the next two years, the biggest increase under any government of any colour in history.”

Measures “ Far From The Billions We Need”

Sam Monaghan, Chief Executive of Methodist Homes (MHA) the country’s largest charitable care provider, said: “A year ago, we hoped that the plans announced to reform the social care sector would lead to improved funding and make services fit for the future. Today the Chancellor has put a pause on those plans with his announcement that reforms are being delayed.

“This is a Chancellor who, while Chair of the Health and Social Care Select Committee, said the sector needed the ongoing injection of £7 billion pounds per year of additional investment, but who today has made the smallest steps in terms of turning his words into actions.

“Any additional money for social care is welcomed, but this is so far from the billions we need if we are to fund the sector properly, support the NHS in discharges from hospital and stem the tide of those leaving care work.

“Care providers need to be paid the true costs of the care they provide, meaning we can look to paying care workers what they truly deserve, that our steeply rising costs are met, and to help introduce stability to care.

“Without this stability we cannot help and support the NHS as we would wish by being there for more older people.”

Funding Injection Welcomed

Nick Sanderson, Audley Group, CEO commented: “An £8 billion funding injection for the NHS and social care sector will be warmly welcomed by the industry. And while it will help in the short term, we must look at other ways to tackle, over the long term, the fundamental issue of how we care for people as they get older. A commitment to supporting specialist retirement housing which prioritises health and wellness, would bring a wealth of benefits, including helping to unplug the housing market as older people will be motivated to downsize, and alleviate pressure on stretched care services. Importantly, at a time of financial strain, it doesn’t need Treasury money to happen. Reforms to planning laws that help expedite the building of these integrated retirement communities would do more to drive change than anything from the Treasury coffers. The cross-party housing for older people taskforce was announced early in 2022. This initiative was, and still is, a big step towards solving the overarching problem this country faces in terms of health, social care, and housing and now it must be advanced.”

NLW “Not Without Challenges”

Director of Operations at PJ care, Lisa Andrew said “As a Real Living Wage employer, one of a small majority in the health and social care sector, PJ Care supports the increase to the National Living Wage to £10.42, especially in these times of financial hardship for care staff.

However, the implementation of this uplift is not without its challenges. With the current inflated costs of essential utility provision, rising food and consumable costs, compounded with below inflation fee increases from the government, the pressures on the sector are increasing exponentially.

The Health and Social Care sector is already under significant workforce pressure, with 165,000 reported vacancies. Should this elevation of the National Living Wage encourage a similar increase in the Real Living Wage, the latest rate for which we will introduce in April 2023 if not before, the elevation in the hourly rate will positively impact 400 staff within our three specialist neurological care centres, which increases the financial pressure on the business.

A review by the government of the current fees payable to the Health and Social Care sector would assist providers in meeting this well-deserved rise. The onus cannot be solely left with providers to plug the gap. This expectation will simply lead to many providers being unable to meet this requirement, forcing closures of homes and ultimately increased pressure on the NHS, as there will be fewer discharge placements, for those most in need, to go to. This will culminate in further pressures on bed availability for the acutely ill in the hospitals.

As highlighted, this rise is not without challenge to the business and we shall review contractor costs and energy suppliers. However, our commitment remains paramount. As an independent family business, we can determine the allocation of funds to meet the priorities, our values are intrinsic to our residents and staff who are our priority.”

Workforce Commitment Plan Welcomed

Richard Murray, Chief Executive of The King’s Fund said: ‘The additional £3.3bn funding for the NHS budget is important recognition from the Government that the health service is on its knees trying to meet demand and keep patients safe. However, with NHS funding on a knife-edge, it will force the service to focus solely on its top priorities and go further on an already ambitious efficiency programme.

‘We warmly welcome the Chancellor’s commitment to a workforce plan with independently verified projections for staff numbers over the next 15 years which means that health and care services can plan to train, recruit and retain the staff they need in future. We hope the necessary resources will also be put in place to meet these needs.

‘Whilst it appears capital funding is protected in cash terms with inflation at 11.1%, the Government will not be able meet its plans to maintain and improve NHS buildings, equipment and IT and will need to cut back its ambitions.

‘The significant additional funding announcement for social care indicates the government’s recognition of the perilous state of the sector. However, increases to the national living wage, hikes in energy prices and ongoing inflationary pressures will all add to social care providers costs. It also remains unclear how much of the additional funding may have to come from council tax rises and where today’s proposals leave local authority finances overall.

‘What we do know is that part of this extra funding is coming from further delay to the much-needed reforms on how we pay for adult social care. This is disappointing and the delay to the extension to the means test and a new capped cost model will leave many thousands of families missing out on this promised new support.’

 

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