Provider instability poses greatest challenge to adult social care budgets, say London boroughs

Adult social care directors in London fear instability among care providers will pose the biggest threat to their budgets over the next five years, according to a new report.

The report by London Councils, which represents the capital’s local authorities,  said directors were most concerned about the cost pressures associated with provider stability and the need to manage local care markets.

It found several councils were planning to invest more in the local market to make it more sustainable, but at a “significant cost” to their “already challenged budgets”.

The concerns sit against a backdrop of increasing fragility in local care markets.

The report, which looked at the state of adult social care in London, said there had been an increasing number of provider closures across the capital. The number of care providers requesting to end their contracts with councils is also on the rise.

The combined worth of contracts handed back to date has been “in the millions”, the report said, with providers citing council rates that do not enable them to operate sustainably and safely as a key reason for terminating arrangements.

It added that councils were working together across London to stabilise the market, but that the “government must also play its role” by ensuring appropriate funding.

‘High vacancy rates’

The report considered the funding pressures faced by adult social care services in London, the efficiency savings already achieved, and priorities for the next five years.

Alongside market pressures, it found directors were most concerned about the costs of supporting rising numbers of people with disabilities, mental health and dementia.

But the four areas reported as currently putting the most pressure on adult social care budgets were the Deprivation of Liberty Safeguards (DoLS), supporting the transition of children to adults’ services, integration, and continuing healthcare.

The report also identified recruitment and retention in the health and social care workforce as a challenge, with vacancy rates reaching 15% within London in 2017-18.

It said that the highest vacancy rates were currently in professional roles, including social workers, nurses and occupational therapists, and that there was a growing dependency on agency and locum staff to “mitigate the risks” caused by vacancies.

‘Services at risk’

The report estimated that by 2025, London councils would face an adult social care funding gap of £540m, which is 15% of the predicted national funding gap of £3.5bn.

It said that between 2015-16 and 2017-18, local councils had saved an estimated £480m, with the highest savings coming from schemes focused on health and social care integration, promoting independence, and managing the local care market.

But it warned that this level of savings could not be maintained without services being put at risk, adding that social care departments must not be expected to do so.

Instead, directors surveyed as part of the report listed their top priorities as investment in prevention and early intervention, further integration of health and social care, and investment in managing demand to delay people from needing care.

The report also called for eight key actions on social care, which included the government “fully meeting” the short, medium and long-term funding pressures in London and elsewhere, and publishing its long-term plans for transforming the sector.

‘Increasing demand’

Ray Puddifoot, London Councils’ executive member for health and care, said: “The sector has shown itself capable of adapting, innovating, and achieving impressive efficiencies – even in the face of a highly-challenging financial environment.

“However, the capital’s growing population means and more more Londoners need social care. It’s vital that services get the resources they need to cope with increasing levels of demand.”

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