MPs launch inquiry into long-term funding of adult social care

MPs are launching an inquiry into the effect of COVID-19 on the adult social care sector and its long-term funding needs following the pandemic.

The Commons Housing, Communities and Local Government Committee has announced the move in response to the additional pressures COVID-19 has placed on adult social care. 

Costs have increased due to the need for additional PPE, cleaning and staff costs, while a fall in demand for services threatens to put providers out of business. The long-term economic, social and health consequences of covid-19 remain uncertain.

In 2018-19 the adult social care sector accounted for 41% of local authority expenditure. The Committee notes that continuing pressures on services and increased demand have been addressed by short-term and fragmented additional funding from central Government, making long-term planning difficult.

The Committee carried out a joint inquiry with the Health and Social Care Committee on the long-term funding of Adult Social Care in 2018. 

It called for the establishment of a Parliamentary Commission to develop a long-term funding solution for adult social care based on political consensus and public engagement, covering housing as well as health and social care services. 

It recommended that additional funding be raised through Council Tax reform, a new ring-fenced social care premium for the over-40s or increases to inheritance tax above a certain threshold.

Building on the work of its predecessor committee, the new inquiry will investigate the likely legacy of the COVID-19 pandemic on the adult social care sector and the impact this has had on long-term funding need. 

It will also examine how additional funds can be raised to ensure the long-term stability of the sector and how the social care market can supported to improve innovation.

Launching the inquiry, Committee Chair Clive Betts MP said:

“The challenge of finding a long-term solution to the financial pressures on the adult social care system is one of the toughest questions we will have to face in the coming years. 

“We have seen year on year the demand on services increasing, while local authority budgets have been stretched more and more. The Government has attempted to address this spasmodically with one-off pots of funding for the most critical needs, but it is clear the we must have a solution that provides a financial plan for decades, not just months”. 

He added that unless the funding of social care is resolved there will continue to be more cuts to other council services, 

“Our new inquiry sets out to understand how COVID-19 has placed further stress on an already challenging environment, and the likely long-term consequences for adult social care. 

“Given the likely long-term financial implications of the pandemic on society as a whole, we will also reconsider how we can provide the necessary funding boost fairly and look at how we can support the sector to innovate the way it provides care.”

Terms of reference

The Committee invites submissions on some or all of the following questions:

• How has COVID-19 changed the landscape for long-term funding reform of the adult social care sector?
• How should additional funds for the adult social care sector be raised?
• How can the adult social care market be stabilised?
• How can the adult social care market be incentivised to compete on quality and/or innovation?

Submitting evidence

Information on submitting evidence is available here. The committee are particularly keen to hear from people with direct experience of the issues under investigation.

The deadline for submissions is 15 April 2021.