As the Chancellor puts the finishing touches to this week’s Budget, anxiety is mounting in and around the social care sector. Among the myriad calls for a limited amount of money, will social services be heard?

There is a risk that the Government will view the ongoing Fair Pay Deal and the long-term aspiration to create a National Care Service as sufficient to justify inaction during this budget period. This would be a risky strategy. If social services are not adequately supported over the next 18 months, there may not be much left to reform, and the weaker they become, the more difficult and costly eventual reform will be.

What’s the problem?

Sharp reductions in central government funding between 2010 and 2014, followed by only gradual increases in subsequent years, made local authorities increasingly dependent on council tax and other sources of local revenue such as the principle of social protection for adults and professional rates.

Funding has failed to meet growing needs and as a result, in 2023/24, councils reported a budget overrun of £586m for social care, with 37% saying they had to draw in non-recurring reserves. A staggering 90% they aren’t sure their budget will allow them to achieve. even their statutory dutiesand the Local Government Association predicts funding gap of £2 billion for local authorities next year.

Furthermore, the sporadic nature of central government funding created a context of uncertainty. In recent years, budget days have been characterized by small top-ups and one-off cash injections, often for specific initiatives. Financial pressures have pushed councils to embrace short-term care purchasing close to or below cost – leaving many care and support providers struggling to make ends meet. This results in high costs for self-financers and can push providers towards closureleaving people with fewer choices and poor continuity of care.

In response to financial pressures, eligibility criteria for care have been tightened and financial resources thresholds have remained unchanged since 2010, leading to an increase in numbers. to be ousted of the public financing system, or find themselves faced with costly supplements.

Estimated age in the UK that as many as 2 million older people have at least some unmet care needs, putting huge pressure on unpaid carers – 68% of whom say they are worried their ability to save and plan for their own future. Long waits for care become commonplacewith more than 220,000 people waiting for a care assessment in March this year – 35% of whom were waiting more than six months.

The cost of living crisis is putting additional pressure on providers and municipalities. To help relieve the pressure, in 2022 the government of the day diverted £3.2 billion in funding. reserved for a set of reforms (including a capping of care costs and an increase in means testing) in the daily provision of services, delaying implementation to 2025.

One of the first actions of the current government was to abandon these reforms in a bid to save money for the Treasury. However, the £1.1 billion planned to implement the reform from 2025 has not been retained for adult social care and will therefore do nothing to ease pressure on council budgets municipal next year.

What does the social services sector need to hear in the Outbox Wednesday?

The whole system, including how revenue is raised, is in desperate need of long-term reform, but the social care sector cannot wait for the eventual creation of a national care service. While the details are ironed out, the sector is in urgent need of stabilization over the next 18 months.

At the very least, the sector will need assurance that national government funding for next year will take into account growing demand and will be increased to account for inflation, so as not to abandon even local councils . more dependent on local revenue collection via mechanisms that vary depending on the region, such as the housing tax. THE Estimates from the Health Foundation that simply keeping pace with current demand will create a funding gap of £600 million this year, rising to £8.3 billion by 2032/33. And this without any expansion or improvement of services and without any provision to protect people from catastrophic costs.

Councils and providers will want to know that the short-term cash injections that saved the sector – such as the diversion of funds intended for day-to-day reform – will be incorporated into the national grant baseline over the coming years. They will also probably want to have maximum flexibility to increase council tax rates and the welfare principle, although residents will not be in favor of an increase in these local levies.

Although hopes for a more radical expansion of public services have been dashed in the near future with the abandonment of a more generous financing system means test and cost capping, many people seeking care will need to commit to the guaranteed minimum income and personal expenses allowance (i.e. the amount of income a person can keep after care costs) will increase at least in line with inflation.

The budget must also take into account the impact of changes to the national minimum wage and the living wage on social protection. With a working population of more than 1.7 million people, the main driver of social protection spending is their salary.

It will be important that funding for the next 18 months is sufficient to cushion any further increases in the National Minimum Wage and Living Wage or any additional increases. improvement in the salary of caregivers. Failure to fund a further increase means that providers, many of whom are small and medium-sized, must absorb the costs or risk going bankrupt, or pass them on to the people who seek care. At a time when needs are increasing and more capacity is needed, not less, it would be unwise for the government to take this gamble.

THE Labor Rights Bill is set to usher in much-needed stability for the workforce with greater access to sick pay and the right to guaranteed hours. For this struggling workforce, these improvements in terms and conditions cannot come soon enough, but the government must be attentive to their implementation. In a sector that relies heavily on zero-hours contracts, a sudden move to guaranteed hours could destabilize the market by increasing costs for providers that they cannot absorb.

No time to rest on your laurels

Having a long-term vision for a national care service is laudable, but it is not a free pass to ignore the immediate plight of the sector. Social protection was on the brink for many years and its threadbare safety net risks fraying beyond repair.

This is neither a benefit nor a burden for national finances. Rather, social services are a critical pillar of our national infrastructure, and adequately funding them is an investment in enabling individuals to live well, exercise choice and independence, and participate in society and work. The government must invest now to stabilize it, otherwise it risks finding that it has little left to reform in the long term.