William Eichler 24 May 2018

IFS report reveals extent of social care funding ‘sinkhole’

Council chiefs have warned adult social care is facing a ‘sinkhole in funding’ which prevents it from easing the demand pressures on the NHS.

In a study published today, the Institute for Fiscal Studies (IFS) has calculated the Government needs to increase taxes in order to keep the NHS afloat.

The financial experts, along with researchers from the Health Foundation and the NHS Confederation, estimated the health service needed an average funding increase of 3.3% a year over the next 15 years just to deliver the current level of service.

They said the increases should be nearer 4% a year in the medium term and 5% in the short term to help the NHS solve immediate problems such as meeting waiting time targets.

As dramatic as this sounds, the IFS emphasised that these increases come after eight years of the tightest spending settlements in the NHS’s history and fall below their long-run average.

The report painted a similar picture where social care was concerned.

Adult social care spending is likely to have to rise by 3.9% a year over the next 15 years taking an extra 0.4% of national income, relative to today, the IFS found.

In total, health and social care spending is likely to have to rise by 2–3% of national income over the next 15 years.

Cllr Izzi Seccombe, chairman of the Local Government Association’s (LGA) Community Wellbeing Board, said this report ‘lays bare’ the scale of the funding crisis facing the health and social care system.

‘If the NHS is to celebrate its 100th birthday, then it’s imperative that adult social care is not only given parity with the health service, but seen as a vital service in its own right and fully funded to future-proof it for the rising numbers of people who need care,’ she said.

‘Adult social care is facing a sinkhole in funding which is putting at risk provision of care for a growing number of people of all ages with care needs.

‘Without an immediate injection of cash, even more providers will either pull out of contracts or go bust, leading to a lack of available care and a decrease in social care’s ability to help mitigate demand pressures on the NHS.’

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