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Public Accounts Committee publishes report into Adult social care in England, HC 518 as Sixth Report of Session 2014-15. 

• Report: Adult social care in England
• Report: Adult social care in England (PDF)
• Inquiry: Adult social care in England
• Public Accounts Committee

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts said:

"We are facing a great adult social care squeeze, with need for care growing while public funding is falling.

The Government’s agenda to change and improve adult social care, most notably through the Care Act, is rightly ambitious. However, it simply does not know whether the care system has the capacity to become more efficient and spend less while continuing to absorb this increasing need for care.

There has been an 8% real terms cut in spending on adult social care between 2010/11 and 2012/13, despite the growth in the number of elderly and disabled people, the groups most likely to be reliant on care.  Care and support has been cut, as with less money to spend local authorities have had to focus on those with the most severe needs.

We are particularly concerned that local authorities have cut costs, partly by paying lower fees to providers of care, which has led to very low pay for care workers, low skill levels within the workforce, and inevitably poorer levels of service for users. Safeguarding referrals recorded by local authorities have risen 13% in the two years from 2011.

It is appalling that up to 220,000 people working in the care system earn less than the minimum wage. In some areas, whilst local authorities might pay private providers £13 an hour, the worker only earns the minimum wage of around £6 per hour. It is also unacceptable that around one third of the workforce are on zero-hours contracts.

At the same time 2.2 million people have had to give up work to care for family members, at extra cost to the Government through the benefits bill.

Whilst we welcome the commitment to this agenda of the Departments involved, we are concerned that they do not fully understand the scale of the challenges facing local authorities, or the costs associated with implementing the Care Act.

The Act introduces new burdens on local authorities and requires unprecedented levels of coordinated working between central and local government and across local authorities and health bodies.

The Departments recognise the complexities and risks involved but we are not convinced that the responsible bodies will deliver on these ambitions and are concerned that they are raising expectations too high.

The Departments should quantify the new burdens the Care Act will introduce for local authorities, establish a realistic timetable for implementation given the financial constraints, and acknowledge the limits on the sector’s capacity to absorb the growing need for care with falling public funding."

The challenge posed to society by the changing and growing need for adult social care is considerable. The need for such care is increasing while public funding is falling. The Government’s agenda to change and improve adult social care is rightly ambitious but achieving these ambitions will require unprecedented levels of coordinated working between government departments, between central and local government and across local authorities and health bodies. The Departments recognise the complexities and risks but we are not convinced that the responsible bodies will deliver on these ambitions and are concerned that they are raising expectations too high. We do welcome the determination of the Department for Communities and Local Government and the Department of Health to get a grip, and their recognition of their ultimate responsibility for the adult social care system as a whole. In this report we set out our concerns and make recommendations in three areas: for collaboration across all bodies involved in the care system; for better understanding of the capacity of the system to cope and for whether money really reaches the frontline services on which people depend; and for the Government’s oversight arrangements to reflect the overriding importance of quality of care in a sector where up to 220,000 workers earn less than the minimum wage and around one third of the workforce are on zero-hour contracts.

Conclusions and recommendations

Adult social care is personal care and practical support for adults with physical disabilities, learning disabilities, or physical or mental illnesses, together with support for their carers. The Government’s objectives are to enhance people’s quality of life, delay and reduce the need for care, ensure positive care experiences and safeguard adults from harm. In 2012-13, local authorities provided or commissioned £19 billion worth of individual packages of care and universal care services. In addition, the NHS spent an estimated £2.8 billion in 2011-12 on social care, while the Department for Work and Pensions’ spending on incapacity, disability and injury benefits totalled £28.2 billion in 2012-13. However, publicly funded care makes up only a minority of the total value of care, and this proportion is decreasing. Most care is provided informally by unpaid family, friends and neighbours. In 2012, the Department of Health announced new legislation, the Care Bill, designed to rationalise local authorities’ obligations and to introduce new duties based on individual wellbeing.

The need for collaboration across all bodies and at all levels

Successful implementation of the Care Act depends on an unprecedented amount of collaboration at every level of government. How well care services meet adults’ needs depends on all parts of the complex system of related public services and forms of support working together. We were pleased to hear of strong joint working between the Department of Health and the Department for Communities and Local Government. But effective joint working is not yet extended to other departments, most notably the Department for Work and Pensions which spends £28.2 billion on incapacity, disability and injury benefits and is reforming the welfare system. For example 2.2 million people have given up work to care, adding costs to the benefits bill and loss of tax revenues to the Government. In introducing Personal Independence Payment, the Department for Work and Pensions expects 600,000 fewer disabled people to receive support towards the additional costs of living with a disability than under Disability Living Allowance. Collaboration is also essential at the local level. Local authorities are sharing and learning from evidence on the ground but sector-led improvement is in its infancy. Costs vary enormously with for example the costs for domiciliary care ranging from £10 per hour to above £20 per hour. We are concerned that the plan to make GPs formally accountable as lead professionals, responsible for coordinating an older person’s care across multiple professions, will not work in practice. We welcome the Departments’ determination to keep a central grip on matters and their recognition of responsibility for the system as a whole. There are clear tensions between the commitment to localisation and the determination to achieve best value across all areas.

Recommendations:

The Department of Health and the Department for Communities and Local Government should expand their effective cooperation to include all relevant government departments, in particular the Department for Work and Pensions.

The Departments should set out how they intend to support local authorities, the organisations that represent authorities and the wider adult care sector, including providers and voluntary organisations, to collaborate, share and learn from good practice. They should consider whether and what action they will need to take if efforts to spread best practice are not effective.

The need to understand how the system can cope with increasing demand and at the same time implement ambitious changes

The Departments do not know whether the care system can become more efficient and spend less while continuing to absorb the increasing need for care. Need for social care is continually increasing because the people who need it, mostly older and disabled people, are two groups in society that are growing in size. Yet public funding to support these groups is falling with an 8% real terms cut in spending between 2010/11 and 2012/13. This has led local authorities to focus on severe need and reduce its spending on preventative care and support to adults. Local authorities’ cost savings have been achieved by paying lower fees to providers, which has led to very low pay for the care workforce, low skill levels within the workforce, and inevitably poorer levels of service to users. We are concerned to learn that up to 220,000 people working in the care system earn less than the minimum wage. We also learnt that in some localities whilst local authorities might pay private providers £13 an hour, the worker would only earn minimum wage of around £6 per hour. We are concerned that the Departments have not fully addressed the long-term sustainability of the adult social care system and that its policies to drive change (the Care Act and the Better Care Fund) are risky, are not supported with new money, and do not acknowledge the scale of the problem. In 2012-13, local authorities spent between £350 and £640 a year on adult social care services for each person in the local authority area. The Departments believe that the wide variations in costs between local authorities indicate that many can meet financial pressures through local efficiency initiatives and transforming services—but the NAO report concludes that much of this cost variation is not due to inefficiencies but can be explained by social, economic and demographic factors, many of which are either outside a local authority’s control or can only be influenced long term. The Departments acknowledge that they do not know how local authorities will achieve the required efficiencies, but still believe the ambitious objectives of implementing the Care Act and integrating services are achievable. Meanwhile, families are caring for relatives more and more, leading to over 2 million giving up work to care at extra cost to the Government through the benefits bill, and almost all seeing no prospect of their quality of life improving.

The Departments do not have the information and evidence to understand fully the challenges that local authorities face in commissioning and providing adult social care and supporting carers. The Care Act will introduce new duties on local authorities, including a duty to assess carers’ needs and provide support and obligations in respect of those that fund their own care (self-funders). These new duties are being introduced as local authority budgets become increasingly constrained with many local authorities already cutting their social care budgets. The Departments neither understand the scale of some of these challenges nor how much it will cost to implement the changes the Care Act will introduce. The Department of Health acknowledges that it does not know whether some preventative services and lower level interventions are making a difference. We welcome its acceptance that more research is needed to identify the most effective ways of working. Local authorities have little information on the numbers, needs, spending and outcomes of self-funders in their areas, nor the numbers of carers. There are concerns that funders are being charged more to subsidise the publicly funded places. Similarly, there are limited data on how people spend direct payments and the quality of care bought. This makes it difficult for authorities to understand, let alone manage, their local care markets. The Departments acknowledge that there is not yet sufficient transparency over data to enable local authorities to see where their costs are high compared to others.

It may not be feasible for local authorities to implement all the proposed changes to the intended timetable. The Care Act will bring significant changes for local authorities and the Departments accept that the changes present a formidable challenge. The Departments expect to see measurable progress from April 2015 but the timetable is very tight. The Association of Directors of Adult Social Care, representing local authorities is sceptical about whether the changes can be implemented by local authorities, in the timescales expected by the Departments. The Better Care Fund aims to enable innovation and accelerate efficiencies, for example, through integration of care and health services, but planning for its introduction has been slower than expected and evidence shows integration takes time.

Recommendations:

The Departments should quantify the new burdens the Care Act will introduce for local authorities, establish a realistic timetable given the financial constraints, and acknowledge the limits on the sector’s capacity to absorb the growing need for care with falling public funding. To achieve this they must:

• address gaps in evidence, information and evaluation in relation in particular to the effectiveness of preventative services, the needs of and quality of care to self-funders, and spending by direct payment recipients.
• take account of the impact that local authorities driving down providers’ fees is having on service quality, the charges to those who fund themselves and use the same care services, and the financial sustainability of providers.
• assess the nature, extent, impact and implications of the growing burden on informal carers and the extra cost they place on benefits paid out by the DWP.
• assess the scope for local authorities to make further efficiency savings, taking account of both best practice benchmarking of costs and of wider social, economic and demographic trends over which local authorities have little control.
• Determine ways to ensure the local authorities do learn from best practice and achieve best value.

The Departments should define what progress is expected under the Act by when, how they will measure progress and how they will judge success. For example, to work with greater numbers of self-funders than they have historically, local authorities will need to understand their number and what needs they have, and set up new systems. The Departments should monitor local authorities’ progress and make their expectations clear on what should be achieved in what timescale.

The need for oversight arrangements to reflect the overriding importance of quality of care

There are continuing risks to quality of care and continuity of services both because of pressures on providers and changing oversight arrangements. We are astonished that up to 220,000 care workers earn less than minimum wage and seemingly little has been done to rectify this, and that around one third are on zero-hours contracts. Around half of local authority directors of adult social care report that cost-saving is putting pressure on the financial sustainability of some private sector providers. The Departments do not know the extent of cross-subsidisation between self-funders and local authority funded users. The Department of Health currently monitors the financial sustainability of the top five providers. From April 2015 the Care Quality Commission will monitor the top 40 or 50 providers and if necessary take action to ensure continuity of care for users. The Commission, which has recently been overhauled, currently lacks the skills to undertake this expanded level of monitoring but the Department of Health is confident the necessary skills will be in place by April 2015.

Recommendation: The Department of Health needs to be assured that the Care Quality Commission is adequately prepared and staffed to monitor both the quality of services and the sustainability of providers under the new oversight regime.

Local authorities, who have a duty to safeguard vulnerable adults from abuse and harm, have seen a recent rise in safeguarding referrals. Local authorities have a duty to work with the police, local NHS bodies and other partners to safeguard vulnerable adults from abuse and neglect. Safeguarding referrals recorded by local authorities have risen 13% in the two years since 2011. This increase may reflect increased awareness of abuse or may reflect overstretched resources and pressure within the system. Far too many referrals, 43%, have been substantiated. There has been a tenfold increase in calls to the Care Quality Commission’s whistleblowing helpline and we welcome the creation, under the Care Act, of statutory safeguarding boards.

Recommendation: The Department of Health, in conjunction with local authorities, needs to understand why safeguarding referrals are rising, in particular whether this indicates rising levels of abuse, and target its interventions and support to local authorities accordingly.