IFS predicts billions required for additional funding for rising costs of adult social care

A recent analysis from the Institute for Fiscal Studies (IFS) has revealed that many billions of pounds will be required by councils to fund adult social care over the lifespan of the next Parliament. We have previously written about the fact that the elderly population is set to increase over the next 25 years (see our previous blog, here) and this is cited as one of the reasons for the required increases in funding, as well as increases in the number of disabled adults and increases in wages.  The IFS report says that “even if council tax revenues increased by 4.5% a year – more than double the rate of projected inflation – adult social care spending could amount to half of all revenue from local taxes by 2035.”[1] The clear need for funds raises the question of how to  make up the shortfall and provide adequate care for the less able and elderly of society. Do councils continue to rely on council tax and business rates for funding or are ring-fenced grants from Westminster the answer?

The answer is uncertain, with each option presenting a number of complications, such as the fact that “ring-fenced grants to top up councils’ own tax revenues may not actually get spent on adult social care services[2] and an increase in to the council tax bill at double the rate of inflation is likely to be met with public push back.  Even if council tax and/or business rates were to be increased, it is unlikely that this would meet the projected required increases in funding for adult social care.

Again this brings us back to the theme of previous blogs that the English and Welsh social care system is poorly funded and under pressure, and it seems inevitable this will lead to further claims against care providers.

Details of the IFS report can be found here

[1] https://www.ifs.org.uk/publications/12857

[2] https://www.ifs.org.uk/publications/12857

Written By Jennifer Johnston, associate and Arthur Caplin, trainee solicitor at BLM.

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