The main failing of the 2014 Care Act was that it did not foresee the future. Would anyone have expected that central government funding for councils would fall by 55 per cent between 2010/11 and 2019/20, with a 29 per cent real-terms reduction in spending power?
The main failing of the 2014 Care Act was that it did not foresee the future.
There were three key issues – local government finance, labour market policy and the COVID-19 pandemic – that came to shape public provision of adult social care in the 10 years after the Act was passed. All had the effect of limiting the money available to spend on putting into practice the Act’s ambitions around person-centred, preventative care, yet they were all hard, if not impossible, to predict.
The most obvious is, inevitably, local government finance. The trail that led to the Care Act began with the Law Commission review in 2008, when the economic consequences of the global financial crisis were far from clear.
By the time the Bill itself was being debated in 2013, austerity had begun to bite and concerns about financing featured heavily in the debate about the Act.
Nonetheless, would anyone have expected that central government funding for councils would fall by 55 per cent between 2010/11 and 2019/20, with a 29 per cent real-terms reduction in spending power? Or that a decade later in 2024, six councils would have declared themselves effectively bankrupt, with more warning they face a similar fate? Few at the time were so pessimistic.
The immediate and obvious casualty of this funding crisis has been a headline feature of the Care Act: the ‘Dilnot’ cap on lifetime care costs. Initially due to come into force in 2016, the measure was postponed in 2015 after lobbying from local government about the financial and other pressures on them. The Minister for Care at the time, Alistair Burt, said: “Government is about taking the hard choices and not proceeding to simply meet a deadline, but listening to the experts in the system and responding to the challenges they set out whilst also tackling the hard task of balancing the books.”
Skip forward to 2022 and we find an almost exact replica of the events of 2015 when plans to introduce a cap on care costs in 2023 were postponed due to local government concerns. The Chancellor, Jeremy Hunt (who, ironically, as Health Secretary had responsibility for plans to introduce the cap in 2016), announced in his autumn statement that the cap would be postponed to 2025. He had, he said, “heard the very real concerns from councils, particularly about their ability to deliver the Dilnot reforms immediately” and so would delay reform for two years, “allocating the funding to allow councils to provide more care packages”.
This apparent difficulty in meeting care needs was despite the fact that councils had, in fact, been spending more and more money on adult social care since the introduction of the Act. After hitting a nadir in 2014/15, total expenditure by councils in fact increased in real terms year after year. However, in practice, this additional spending was not going on increasing the numbers who received care or on enhancing the quality of that care, as the Care Act might have hoped. Instead, at least part of it was spent tackling the consequences of a second key trend, some distance removed from social care: labour market policy.
Though the National Minimum Wage had been introduced in 1999, in 2016 it was ‘supercharged’ by the then Chancellor, George Osborne. Rebranded as the National Living Wage it went up by 50p in 2016 (the largest increase ever) to £7.20 and continued to increase subsequently. The impact on care worker pay was immediate and significant, with average pay going up in real terms every year from 2015/16 until 2021/22.
That was clearly good news for care workers but the costs of it were inevitably born by providers who, in turn, sought higher fees from council commissioners. And, to some extent at least, they were successful. Average fees for residential and nursing care home places, and for home care, all rose in real terms from 2015/16 to 2022/23.
The final key issue was, of course, the pandemic. The immediate effect on people drawing on care, was often disastrous, with at least 45,000 deaths involving COVID-19 in care homes. Lockdown was hardly the circumstances in which the personalised care envisaged by the Care Act could be expected to flourish, as residents of care homes again were isolated from friends and families for months. Financially, COVID-19 did bring a significant injection of government funds, but these were again targeted at ensuring the provider sector survived the pandemic rather than on improving either the number who received direct care or its quality. The funding appeared to achieve its objectives of preventing widescale provider closures but has now largely been phased out.
Of course, not all the failings in social care since 2014 can be neatly put down to an unforeseeable lack of money. The Act aimed to promote a change in council strategy and culture that has not happened, at least not consistently. There is little evidence that councils have moved towards the more preventative approach the Act aimed to champion: levels of reablement and carer support are barely changed since 2015/16. Most tellingly, the use of direct payments – which the Act sought to champion in the name of personalisation - has gone down, not up, since 2015/16 (ironically, people using direct payments reported the greatest change during COVID-19, when councils - out of necessity - relaxed restrictions on their day-to-day use).
Nonetheless, it is clear that funding has been a key reason for the failure of the Act to deliver on its promises and most obviously on implementation of charging reform. That in turn has left us in the perverse situation whereby, twice, councils in effect vetoed reform by – not unreasonably - pleading poverty.
With the financial situation of local government now even worse, that begs a question about whether any serious reform of adult social care can happen until some future happy day when councils believe their finances are in decent shape.
That is clearly not the context in which the Care Act would have wanted to be discussed on its 10th birthday, but it is the reality.
