Funding for adult social care in England

This briefing provides information on the funding local authorities receive to provide adult social care services in England. Information on funding support for individuals with care needs is provided in a separate briefing: Paying for adult social care in England.

Funding pressures

In 2022/23, local authorities in England spent £20.5 billion on adult social care (net current expenditure). This represents the biggest area of council spending after education.

Several factors contribute to funding pressures on adult social care services, including:

• Local government finances: the National Audit Office has highlighted that “local authority finances are under significant pressure” and “this pressure impacts on the funding available for adult social care.”
• Demographic pressures: the number of older people (the group most likely to need social care) is rising faster than the population as a whole. There is also increased demand for care from working age adults.
• Increases in the National Living Wage: the Association of Directors of Adult Social Services (ADASS) estimated the increase in the national Living Wage from April 2023 would cost councils around £1.8 billion in direct and indirect costs related to adult social care.
• Increasing costs of care: the unit cost of care packages to support people with increasing complexity of care needs has been ranked as the main area of concern by Directors of Adult Social Services in each of the last three years.

It has been suggested that these financial pressures contribute to several issues in the sector, including unmet or under-met need (PDF), high care costs for individuals, difficulties attracting and retaining staff, delays in accessing support, and instability in some care markets (PDF). These issues can also have a knock-on effect on health services, for example by contributing to hospital discharge delays.

How much funding does social care need?

Estimates of how much funding adult social care needs vary. In an October 2020 report (590KB, PDF), the Health and Social Care Committee said an additional £7 billion per year was required by 2023/24. It added that this was only a “starting point” and “the full cost of adequately funding social care…is likely to be substantially higher.” The Health Foundation has estimated that an additional £8.3 billion will be required by 2032/33 just to keep up with growing demand.

Additional funding for 2023/24 and 2024/25

At the Autumn Statement 2022, the Government said it would make available up to £2.8 billion in 2023/24 and £4.7 billion in 2024/25 to help support adult social care and hospital discharge. This included:

• £1 billion of new grant funding in 2023/24 and £1.7 billion in 2024/25, comprising:
  • £600 million in 2023/24 and £1 billion in 2024/25 to help get people out of hospital and into care settings. The funding will be split 50/50 between local authorities and the NHS and pooled as part of the Better Care Fund.
  • £400 million in 2023/24 and £680 million in 2024/25 which will be distributed through a grant ringfenced for adult social care.
• £3.1 billion originally allocated for now-delayed charging reforms. The funding will instead be allocated through the Social Care Grant for adult and children’s social care (£1.3 billion in 2023/24 and £1.9 billion in 2024/25).
• £1.7 billion from assumed increases to council tax (the Autumn Statement said local authorities would be allowed to increase the adult social care precept by up to 2% per year in 2023/24 and 2024/25).

In July 2023, the Government additionally announced that £570 million originally committed for wider system reform would instead be provided to local authorities through a new ring-fenced grant for adult social care (£365 million in 2023/24 and £205 million in 2024/25). It added that a further £30 million of funding originally committed for system reform (later increased to £40 million) would be provided to local authorities in the “most challenged” areas to improve social care capacity and hospital discharge rates.

Following its consultation on the provisional local government finance settlement, in January 2024 the Government announced it would provide an additional £500 million for the Social Care Grant in 2024/25.

While the additional funding has been welcomed, concerns have been raised that it will not be sufficient to address all the issues in adult social care. It has also been suggested that by re-purposing funding originally committed for reform to “keep afloat the existing system, the government is acknowledging the end of its broader ambitions for social care.”