Adult social care: PAC raises alarm as Government falls short of promise to fix crisis

Chronic understaffing, rising waiting lists and patchwork funding place sustained financial pressure on local authorities 

PAC fears the absence of a long-term funding settlement hinders sector’s ability to implement long-term planning

Government is falling short on its promise to “fix the crisis in social care” as chronic understaffing, rising waiting lists and patchwork funding place sustained pressure on local authorities. In a report published today, the Public Accounts Committee (PAC) calls for stronger leadership, long-term financial support, and a clear workforce strategy to address key shortfalls in the adult social care sector.

In 2021, the Department of Health and Social Care (DHSC) set out a 10-year vision for adult social care. In the same year, the Government committed £5.4 billion funding over three years, on top of existing budgets, to reform adult social care. However, in April 2023 plans for system reform were revised, scaling back short-term plans to £729 million over the period 2022-23 to 2024-25. Worryingly, Government has no roadmap for achieving its vision, or any targets or milestones beyond 2025, with nothing meaningful in place to demonstrate progress.

Workforce vacancies in the sector, which employs around 1.6m people, exceeded 152,000 in March 2023, a vacancy rate of almost 10%. The PAC fears the workforce plan set out to address this shortfall is woefully insufficient to the scale of the task. The DHSC’s future reliance on overseas staff raises significant questions of the impact of proposed visa restrictions and risks of exploitation. The demand for adult social care services in rural areas is of particular concern to the PAC, as it is set to rise against a backdrop of chronic understaffing in these communities.

In 2022-23, local authorities supported more than one million people with care needs, at a cost of £23.7 billion. As at Autumn 2023, there were almost half a million people awaiting attention on their case, and £2.7bn in additional funding was allocated in 2022 in response to emerging pressures. However, the PAC remains unconvinced whether government knows if it is achieving value for money from this additional funding, and seeks assurance that funding for market sustainability and improvement has not instead ended up increasing profit margins for some providers.

The PAC’s inquiry challenged the Government on whether there would ever be a multi-year funding settlement that will allow local authorities to set out long-term programs to achieve the fundamental transformations needed in this sector. Given it has a 10-year vision for adult social care reform, the report urges the DHSC to set out how it will ensure more stable funding, and what it can do to give local authorities greater certainty to plan in the long-term.

Dame Meg Hillier MP, Chair of the Committee, said: “Years of fragmented funding and the absence of a clear roadmap has brought the adult social care sector to its knees. Waiting lists are rising, the sector is short tens of thousands of essential staff, and local authority finances are being placed under an unsustainable amount of pressure.

“The decision to dedicate a single chapter in the NHS strategy to the social care workforce does not do justice to the level of work that will be required and feels to us like a bit of a cop-out. While an NHS-style workforce strategy for social care may not be feasible, the DHSC must set out how it will how it provide leadership across the sector to identify and address workforce challenges.

“Whilst we welcome the increase in funding, we fear this will do little to address the key challenges faced by the sector in the absence of a well-funded multi-year strategy. A 10-year vision is all well and good, but this alone is not enough to bring about the fundamental changes this sector so desperately needs.”

Conclusions and recommendations

1. It is far from clear if Integrated Care Systems are making a demonstratable difference to adult social care delivery. We remain concerned about under-representation of adult social care in health-dominated systems and are deeply sceptical about the feasibility of integrating health and care when they are funded so differently. Despite the Department’s assurances of “colossal improvement” on data and on how well the system is working, we see no clear strategy for pulling together data from across the sector and making it accessible. The public does not yet have access to data to see how care outcomes in their local area compare nationally or to other areas in the way they could with Primary Care Trusts. Time will tell whether Care Quality Commission (CQC) inspections of local authorities and ICSs will enable greater insight across public services. While inspection may give CQC and the Department an aggregate picture, Parliament and the wider public may not enjoy the same transparency.

Recommendation 1: In its Treasury Minute response, the Department should set out what is doing to:

• bring together its performance and inspection data relating to adult social care (from Integrated Care Systems and other sources); and
• ensure that these data are accessible, publicly available and enable people to i) assess whether patients are getting better outcomes in their areas and ii) allow the public to make comparisons between different areas.

2. We remain unconvinced as to whether the Department knows if it is achieving value for money from the additional funding going to adult social care. Recent funding for adult social care includes short-term, top-up pots of money in response to crises. In response to emerging pressures in 2022, government awarded £1.6 billion to help speed up hospital discharge through the Better Care Fund and £1.1 billion new grant funding to local authorities through the Market Sustainability and Improvement Fund (MSIF). It is troubling that, though MSIF funding is intended to support “tangible improvements” in adult social care, the Department did not quantify by how much the funding has contributed to its three objectives of increased staff pay, increased fee rates paid to providers or reduced waiting times. It remains to be seen whether the new CQC inspection regime, and promised improvements in local commissioning, can provide better assurance that top-up funding is not simply going into provider profits. We are concerned that the Department’s grasp of what it is getting for the £1.6 billion funding to support hospital discharge, is similarly vague. Although ‘supported discharges’ (the number of people being discharged from hospital with a package of care) may well have increased as a result of this funding, it is far from clear whether this represented good value compared with other interventions.

Recommendation 2: The Department should write to the Committee alongside its Treasury Minute response to set out how it is assuring itself that each additional fund aimed at supporting adult social care is achieving value for money, including on benefits in relation to costs, for example:

• how much additional capacity it has bought with the discharge funding through the Better Care Fund.
• how it will ascertain whether funding for market sustainability and improvement has not just ended up increasing provider profit margins.

3. Local authorities are having to plan and commission adult social care services against a backdrop of fragmented and uncertain funding. We have long voiced our frustration at the short-term and multiple funding pots provided to local government and recommended that government explore ways to provide more confidence over long-term funding. We note that funding announced for adult social care in 2022 covered 2023-24 and 2024-25, yet we remain concerned at the perpetual late announcement of overall funding for local government. We welcome the additional funding for adult social care in recent years but recognise these are short-term top-ups, often designed to be spent on specific initiatives (such as increasing pay to providers) with no guarantee that they will continue. The latest government announcement of an additional £500 million for adult and children’s social care is welcome but comes just weeks before the next financial year is due to begin and may be too little, too late to have a demonstrable impact. Patchwork funding and short-notice announcements hinder the sector’s ability to plan for the long-term and risks undermining delivery of the Department’s 10-year vision for adult social care. Funding for adult social care, including supporting the planned reforms, for 2025-26 onwards will depend on the next spending review.

Recommendation 3: Given it has a 10-year vision for reforming adult social care, in its Treasury Minute response, the Department should set out:

1.                               i)            what it is doing now to prepare for the next spending review and make the case for more stable funding, and
2. ii) what it can do to give local authorities greater certainty over funding and allow them to plan for the longer term.

4. Notwithstanding its recent efforts to make adult social care a more attractive career, the Department has still not produced a convincing plan to address the chronic staff shortages in the long-term. Workforce vacancies in adult social remain worryingly high with some places, such as rural areas, particularly affected. In 2022-23, workforce vacancies exceeded 152,000 (9.9% vacancy rate) despite overseas recruitment of 70,000 staff. Proposed visa restrictions and risks of exploitation raise significant questions about the Department’s reliance on overseas staff in future. Given these significant challenges and numerous, repeated calls for a workforce strategy, we find the white paper’s coverage of the workforce woefully insufficient to the scale of the task. It does not tackle all the significant factors impacting recruitment and retention. For example, there is scant detail on pay. Neither does the white paper provide detail on workforce plans beyond 2025 despite the Department’s forecasts that the number of adult social care jobs will grow by almost one-third by 2035. Once again, we see one approach for the NHS and another for adult social care. While we welcome the Department’s plans to professionalise the workforce, it falls short on providing leadership on pay and ensuring parity of esteem with equivalent NHS roles.

Recommendation 4: In the absence of an NHS style workforce plan, alongside its Treasury Minute response, the Department should write to the Committee setting out how it will lead the sector to identify and address workforce challenges, including:

• achieving a sustained reduction in the number of vacancies in the sector (beyond 2025)
• addressing the challenges and risks associated with international recruitment
• tackling local variations in vacancy rates
• addressing issues around disparity with NHS pay
• assessing which workforce initiatives are most effective for recruiting and retaining staff.

5. Long-awaited workforce reforms are way behind schedule and too dependent on a ‘novel’ payment system. We welcome the Department’s launch of the care workforce pathway, which aims to provide consistent career progression for those working in the sector, but we are concerned at the lack of progress on other workforce reforms. At £265 million, they make up the largest budget in the scaled-back system reform portfolio (£729 million). It is alarming that many workforce projects are behind schedule because they depend on delivery of a bespoke payments system to pay suppliers directly. These include the Department’s project to increase the number of regulated professionals and the £136 million flagship project to improve workforce training, originally planned for September 2023. Although the Department assures us that its decision to build a bespoke system was well-evidenced, this ‘difficult’, ‘complex’ and ‘novel’ project is creating a worrying bottleneck and the Department acknowledges that the target date of summer 2024 is already at risk.

Recommendation 5: The Department should in its Treasury Minute response to this report:

• confirm which of the workforce reform projects depend on this payments system and update us on progress with each; and
• update the Committee on progress with the payments system (including any updates to the RAG rating and implementation date) and when it expects the workforce initiatives that depend on it to start to have an impact.

6. The Department faces significant challenges in delivering its ‘vision’ for adult social care reform, and Parliament and the sector must be able to hold it to account for its progress. It is worrying that the Department has no roadmap for achieving its 10-year vision for adult social care, or any targets or milestones beyond 2025. Though we agree that some flexibility to adapt as the Department learns has merit, there is currently nothing meaningful in place to demonstrate progress towards targets. With charging reform postponed, system reform scaled back and limited progress from the Department even on its reduced ambition for system reform, we cannot help but be sceptical as to whether the vision is still achievable. The Department has given us little assurance that charging reform, delayed to October 2025, can be delivered on schedule; work will need to start soon but funding for it will depend on the next spending review. We are encouraged that the Department says it is monitoring local authorities’ capacity to deliver charging reform alongside system reform and other departmental initiatives but somewhat concerned that it is not yet sequencing activity to alleviate pressure.

Recommendation 6: The Department should set out a roadmap for delivering its vision, pulling together all its reform activity (system reform and charging reform), and the risks to delivery with key performance indicators and should publish six-monthly updates on progress to time and budget.