Social care in London ‘faces £540m funding black hole by 2025’

21 Aug 19

Adult social care in London faces a budget gap of £540m by 2025 unless a national funding shortfall in the sector is addressed, according to new research.

The State of Adult Social Care report, published by London Councils today, shows that adult social care services in the capital have delivered almost half a billion pounds of efficiencies since 2015 and saved the NHS around £4.6m a year by reducing unnecessary hospital stays.

However, increasing demand for adult social care in London and growing numbers of people of working age requiring social care provision have put the sector under financial strain.

The report highlighted the demographic challenges facing adult social care in London, where, over the next twenty years, the number of people aged 65 and over is expected to increase by 71%, and those aged 90 and above by 156%. 

The adult social care precept, now entering its final year, had played an important role in easing pressures in the capital, raising £63m across London in 2018-19, it said. 

However, the termination of the scheme could increase the financial burden on those councils which had depended on it, and clear plans were needed to show how social care would be funded in the future, the report warned.

“Taking into account demographic changes, as well as other cost pressures such as the implications of the national living wage and changes to deprivation of liberty safeguards bringing new responsibilities to care managers, London Councils estimates that the gap between adult social care costs and the funding provided to boroughs will reach £540m by 2025,” it said.

The Local Government Association has predicted that the national funding gap in adult social care will reach £3.5bn over that period. 

The report found that boroughs achieved £480m in adult social care savings between 2015-16 and 2017-18 through increased efficiency. Efforts to support service users to remain in their own homes had led to the capital reducing costs by having the lowest rates of admission to nursing and residential homes per 100,000 people of any region of England, it said.

It also drew attention to the contribution of the sector in alleviating pressure on the health service, estimating that boroughs save the NHS around £4.6m a year by minimising delays in transfers of care. 

Ray Puddifoot, executive member for health and care at London Councils, said that adult social care services were critical to the performance and sustainability of the NHS in the capital, as well as playing a vital role in meeting the needs of Londoners.

“The sector has shown itself capable of adapting, innovating, and achieving impressive efficiencies – even in the face of a highly-challenging financial environment,” he said.

“However, the capital’s growing population means more and more Londoners need social care. 

“It’s vital that services get the resources they need to cope with increasing levels of demand.”

Ian Hudspeth, chairman of the LGA’s community wellbeing board, said the report showed that councils were making a positive difference to people’s lives and easing the financial strain on the NHS.

“If councils are to continue helping people who rely on vital care and support to lead the lives they want to lead, they need funding certainty for both the immediate and long-term,” he said.

“We urge the government to address the growing funding gap in the forthcoming ‘Spending Round’ and to propose a long term sustainable solution as soon as possible.”

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