Fixing Social Care Funding

Author: Simon Duffy

There have always been complaints about the funding for adult social care and for good reason. The model for funding social care funding is still fundamentally rooted in the 1834 Poor Law. Services, if you can call them such, were designed to be unattractive and institutional and they were only for the poor.

Today, nearly 200 years later, adult social care remains severely means-tested, which means you only get it if you are poor enough and it will be taken away from you if you start to increase your income. Often you have to sacrifice some of your modest disability benefits if you want to receive social care support. Still today most of the funding goes on residential care, usually far from your local community and some people are still being sent to extremely expensive private institutions—creating high levels of profits for some, misery for others.

In fact the last time there was a significant investment in social care it was during the 1980s when residential care home providers were able to claim new money from an uncapped Board & Lodging fund. By the early 1990s this money was capped and transferred to local government along with NHS service funding for social care services that were also transferred to local government. This was the last significant change to the social care system. Ever since then social care funding has generally been declining as a percentage of GDP. It has fallen by about 50% over the last 15 years from about 2% of GDP to 1% GDP.

Cuts to social care have been severe and there effects are seen in a number of ways:

• Fewer people receiving support than 15 years ago, despite increased need
• Fewer people getting assessments than 15 years ago, despite the Care Act 2014
• More disabled people in poverty and at risk of harm
• Cuts in preventive and community services and an increase in institutional solutions

There is often talk of the system breaking down. But this is misleading. The system has already broken down, but the price for this is paid by disabled people not getting the support they need, not being able to contribute to the community and by enormous pressure placed on unpaid carers, who remain the bedrock of the whole system.

In 2019 we calculated what it would take to end means-testing in social care, meet unmet needs and lift basic salaries social to a reasonable level. Our calculations suggested that as a minimum we’d need to double spending on adult social care back to the 2% of GDP level and protect this percentage over the long-run.

Whose fault is this problem?

The way in which the social care crisis plays out in England encourages disabled people and other advocates to see local government as the problem. It is local government that is responsible for funding social care and it is local government that is cutting services. But of course this is primarily because local government is a particularly weak and vulnerable part of the welfare state. In the Austerity measure of 2010 it was local government that bore the brunt of central government cuts and so these were passed on to disabled people (and I use that term to include all disabled people, including disabled people over 65 who need social care). The conflict between disabled people and local government is very valuable to central government because it can then blame local government for failures that have actually been created centrally. From the perspective of the Treasury this confusion and conflict is the perfect distraction for continuing the current failed system.

What can we do?

There are no simple ways out of this problem and they all require quite radical changes in behaviour, which currently all seem unlikely.

One strategy would be to return to the basic principles of prevention and personalisation that were largely abandoned in the years after 2010. It is possible to release some efficiencies even from the current resource levels if local authorities were willing to be more creative and to work in closer partnership with disabled people and families. Examples of possible approaches include:

1. Reverse the effective opt-out of residential care from the personal budget model. We know that some, especially younger people in residential care can be more efficiently supported as full citizens with ordinary housing rights and flexible support. We can develop personalised support solutions in our own communities and end expensive institutional placements.

2. We could encourage people to be more creative by allowing people to know their budget upfront and by ending the use of hourly rate models to develop support solutions, or at least be very clear that the hourly rate is only a starting point and enable people to explore more efficient solutions to their needs.

3. We could embed support for coordinating and developing support solutions in neighbourhoods and use models like Local Area Coordination, micro-provision, community connecting and peer support to ensure that people are developing solutions together and in the context of emerging community opportunities.

4. Social workers could be embedded in the community and work more closely with health and community colleagues to help people avoid institutional outcomes and encourage community solutions.

5. Instead of forcing people to choose between burdensome direct payment systems and traditional institutional services people manage their personal budgets in partnership with support providers, community groups or could pool some or all of their budgets in neighbourhood networks like KeyRing. Most local authorities have failed to implement effective systems for Individual Service Funds and this makes the system far more inefficient and ineffective than it needs to be.

6. Organise all support on a neighbourhood basis. When support is local it is more efficient, responsive and preventative. Locally organised support is also good for the workforce—mostly women—who are currently exploited by systems that lead to too much travel, stress and uncertainty.

However, especially since Austerity, the room for financial efficiency from these approaches has reduced as the available funding has reduced. Given some of the best examples of personalisation we’ve seen we may expect a 25% efficiency improvement if local authorities could work differently, but this will be a one-time improvement. It helps for a while, but it does not change the fundamental negative dynamic that is built structurally into the system.

If we want to change the dynamic of the system we need to think differently about how we bring about social change. It is unlikely that central government will change its behaviour simply because that is the right thing to do. Although a few Labour politicians (Andy Burnham and Ivan Lewis for example) aspired to give social care a new status and funding base they were not able to make any progress. Ultimately we should not seek to achieve social change by just hoping for the best.

Internationally one country stands out as offering a positive way forward—Australia. In Australia the disability movement came together with families and service providers to create the Every Australian Counts campaign. They successfully made disability support and mainstream issue that is well covered by the media, which gets significant public support and which all the main political parties promise to protect. I have argued that the actual model they developed in Australia (called the National Disability Insurance Scheme) is deeply flawed. However that is not the fault of the campaign and unfortunately the model was designed by bureaucrats away from the direct influence of disabled people. In financial terms I have seen no other country even approach the level of extra financial support disabled people achieved. It looks like that there has been a 400% increase in spending on disability support over a ten year period.

If we were to build on the success of the Australian disability movement I think we need to start by working in partnership with others. Currently the disability movement is divided and it is suspicious (often for good reason) of some other potential partners who may have different perspectives. However if you want to reach the public (who really don’t care about the historical tensions in our field) you have to create a largely united front. In fact, I would suggest that we should go beyond the Australians and even see if we can even get local government to be a partner in the process of defining the new deal for social care. Disabled people hold the trump hand in the process of coalition building—they can veto any proposal, but I think it extremely unlikely that they will be able to bring about the necessary changes on their own.

We also need to follow the Australians in making sure that social care is seen as a universal part of the welfare state. We need to make sure people understand that social care is for everyone - at every age - just like the NHS. This should mean getting rid of means-testing (and we need to reframe means-testing as the disability tax that it is). As part of this we should challenge the distinction between children and adults services that creates confusion at the post of transition and also undermines our effectiveness at supporting families well. We should also revisit the boundary between the health and social care system—perhaps in the future we should be distinguish between basic services and personalised services—neither should be means-tested.

Unlike Australia we need to take care to think about what we really want. Adding more money into the current system is not necessarily a good idea when too much of that money goes into exploitative institutional solutions. If I were to pick a handful of key principles for a better system for the future then it would be these:

• A strong framework of universal rights and system to ensure budgets are portable so citizens can move between places without having to renegotiate every details of their daily lives. One approach might be to reconnect personal budgets to the basic benefit system and I would suggest that personal budgets could be treated as additional bolt on benefits (even if they were then managed by another agent or in another system).
• Bring unpaid carers into the story. 80% of care is provided by family and friends. It is unlikely that this could be all replaced with paid support (which would possibly push the bill for social care reform up towards 10% of GDP). And it is also not obviously a good thing. Many forms of natural support (at home, in work and in the community) are preferable to paid support. However we need to be paying much more attention to the needs of carers. We can do much more through benefit reform and practical measures at a local level to make care easy, natural and better distributed across the whole community.
• Change the basic economics of society. Inequality is inefficient and the growth of internal salary inequalities and privatisation within social care reduces the efficiency of the whole of the public sector. Creating a system of basic income to create higher income floor for disabled people and carers will reduce poverty but also release more capacity. The untapped capacity of ordinary people adds up to more than the whole of health and social care spending together.
• Focus more on inclusive communities and citizenship. Our ability to enable people to have good lives is our ability to help each other and the best place to make that happen is at the level of the neighbourhood. There is no attractive and sustainable model for living together on this planet which doesn’t require us to be better citizens and to building more inclusive. We need to develop models of Neighbourhood Care that shifts our focus into the hyper local this is the central focus of Citizen Network’s work at the moment.

These may seem heady and difficult objectives. So in the meantime I’d make one very practical suggestion:
Practically - at a local level the priority should be peer support. Peer support can mean a whole range of things, but at the very least this means

• Create networks so people can help each other out with practical problems
• Develop expertise in the using the law to defend your rights, identify the right experts locally and nationally.
• Support each other in the work of personal and collective advocacy.
• Create systems for communicating internally and externally.
• Create a collective voice locally.

I’d like to thank Bristol’s Meeting Needs Group for inviting me to give this talk and congratulate them for bringing together a diverse range of advocates and perspectives. This is essential to our shared future.

References:

Duffy S & Peters G (2019) Fully Funded Social Care. Sheffield: Citizen Network Research.
Resources on Neighbourhood Care: https://citizen-network.org/work/neighbourhood-care
Article on Australian advocacy: https://citizen-network.org/library/working-for-lives-of-common-dignity.html
Join Citizen Network:https://citizen-network.org/join

The publisher is Citizen Network. Fixing Social Care Funding © Simon Duffy 2025.