Adult care reforms could cost £10bn more than planned and need 4,300 more social workers

New analysis by council leaders finds that the costs of landmark adult social care reforms could be a minimum of £10bn higher than currently estimated.

The ‘Preparing for Adult Social Care Reform’ report, by the County Councils Network (CCN) and Newton, used postcode-level analysis to understand the impact of the reforms across the country, finding that the costs could be “significantly underestimated”. They also warn that the reforms could create a “workforce crisis” in social care, with over 5,000 extra staff projected to be required to carry out extra care and financial assessments for those seeking to benefit from the reforms.

The report says the reforms – which include a cap on care costs of £86,000, a means-test for over 65s, and new ‘fair cost of care’ – along with their administrative overheads in England will cost a minimum of £25.5bn over the next decade, compared to the Government’s estimate of £15.6bn for the same elements of the reforms.

The analysis suggests more people will benefit from some financial support under the means test and cap, meaning the cost of this element alone is £2.5bn higher than Government projections.

The report finds that there is also significant regional variation in the costs of implementing the reforms, with councils in county and rural areas disproportionately impacted. Councils in England’s counties account for 57% (£14.3bn) of the total estimated minimum costs of the reforms over the next decade. This is compared to 19% (£4.9bn) in urban metropolitan borough councils in the North and West Midlands.

Analysis found that an extra 4,300 social work staff will be required to carry out the additional Care Act assessments, reviews, and case management, on top of a current vacancy rate of 1,782. In addition, an extra 700 financial assessors will also be needed to carry out further financial assessments if no changes to existing ways of working are made. The report projects an extra 200,000 care and financial assessments will be required annually, which determine the level of support an individual receives, at a cost of £1.9bn to councils over the next decade.

In a survey of its members – 23 county councils and 13 county unitary authorities – the County Councils Network found that more than three quarters (77%) said that they would be unable to allocate any more resources from other service areas to pay for any financial shortfall, whilst nine in ten (91%) said they were ‘very concerned’ they will be unable to recruit enough staff.

Once again, it says that county councils and rural areas could face the biggest financial and workforce challenges, facing a minimum funding deficit of £7.6bn unless the Government provides more funding and changes the way it allocates resources. Of the total expected additional staff, 3,000 new social workers and financial assessors will be required in these areas – 60% of all new recruitment.

The analysis shows that in order to properly fund these reforms, the Government may potentially need to spend half of the Health and Social Care Levy by 2032 on these proposals alone, irrespective of other social care pressures in the system.

Two-thirds of county councils felt that they were ‘not well prepared’ for the reforms due to funding shortfalls and a tight timescale of implementing them from October 2023, instead supporting delaying key aspects of the reforms beyond next Autumn, rather than a ‘big bang’ of introducing all of them at the same time.

Cllr Martin Tett, Adult Social Care Spokesperson for the County Councils Network, said there was ‘clear support’ for the reforms from local government, but that central government must account for their significant financial and operational cost.

“We urge ministers to clearly examine these findings, which show costs are likely to be higher than the Government is forecasting, and potentially devastatingly so in some regions.”

“Local authorities are also facing a mountain of extra assessments required for the thousands of people who will approach their local authority to benefit from the reforms and it will be almost impossible to recruit the extra staff required.”

Daniel Sperrin, Director at Newton, said: “It is evident that whilst offering clear benefits for residents, the reforms will have a profound financial and operational impact on local authorities and providers. We hope that the findings and recommendations from this report will help both local and central government to prepare to implement the reforms, and so help realise the opportunities that they present.”