LGA warns of £1.3bn social care funding gap

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The Local Government Association (LGA) has called for government action to address a £1.3bn funding gap in adult social care by the end of the decade.

The plea comes in the LGA’s submission to the Treasury ahead of its Autumn Statement.

In the report, the LGA states: “The use of ‘fair price of care’ calculations developed by provider organisations suggests that the scale of the immediate challenge could be in the order of at least £1.3bn.

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“This is purely indicative of the gap between what providers say they need and what councils are currently able to afford.

“Stabilising the care market and ensuring social care is on a sustainable financial footing is vital to ensuring that councils can meet the essential and critical care needs of elderly and vulnerable people, and it also critical to reducing pressure on hospital beds and to the deliverability of NHS Sustainability and Transformation Plans.”

The statement highlights additional pressures created by demand, inflation pressures and the National Living Wage and the National Minimum Wage.

“This backdrop – allied to the back-loading of the additional money in the improved Better Care Fund and the impact of wider council funding pressures on adult social care – has made the foundations of our adult social care system extremely unstable,” it says.

In the six months to July 2016, 77 councils have reported at least one residential/nursing care provider going out of business.

The submission calls on the government to bring forward £700m of the up to £1.5bn additional funding for social care through the improved Better Care Fund by 2019/2020 as announced in the 2015 Spending Review.

Financial challenges facing local government, 2016/2017 to 2019/2020 (£m)
2016/2017 baseline spend 2017/2018 2019/2019 2019/2020
Adult social care – forward cost projection 14,380 15,444 16,629 17,833
Source: LGA.

 

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