Social care for the elderly and disabled could be facing a potential funding gap of at least £2.6bn by the end of the decade, council chiefs warn.

The Local Government Association’s (LGA) submission to the Treasury ahead of the Autumn Statement revealed the immediate pressures threatening the stability of the care provider market could amount to at least £1.3bn.

It also said councils estimate that by 2019/20, a further £1.3bn will be required to deal with the additional pressures brought about by an ageing population, inflation, and the cost of paying the National Living Wage.

The scale of underfunding in social care could even see more providers either pull out of the publicly-funded care market or go bust, the LGA warned.

‘Our analysis shows the sheer scale of the funding crisis we face in social care, both now and in the near future, as well as the damage done from the historic underfunding of adult social care,’ said the chairman of the LGA's community wellbeing board, Cllr Izzi Seccombe.

‘Councils, care providers, charities and the NHS are all united around the need for central government to fully fund adult social care.

‘This is essential if we are to move away from just trying to keep people alive to ensuring they can live independent, fulfilling lives, as well as alleviating the pressure on the NHS.’

The LGA’s warnings follow new research by the consultants Newton Europe which found one in four hospital admissions (26%) could have been avoided if opportunities to intervene had been available or not missed.

The researchers, who examined thousands of anonymised case notes, also discovered almost half (45%) of decisions about patients' care could be improved.

Moreover, Newton Europe’s findings showed where integration of health and social care was working, fewer people needed to be looked after in residential care.

Responding to Newton Europe’s LGA commissioned report, Cllr Seccombe said: ‘This report sets out the evidence for improvement in providing more integrated care and critically, the key factors required in the approach to making that change a success locally.

‘In almost every case there was evidence of over-provision of care. It was found that robust reviews by different professionals, at key decision points, can have a significant impact on consistency of decision-making, whilst requiring only a relatively small investment in terms of resource.

‘Savings identified would be achieved by shifting resources to support people living more independently than they do currently. This would mean moving funds from acute to community and social settings.

‘This could be achieved by Clinical Commissioning Groups using the Better Care Fund to invest in care outside hospitals.’