• Alex Pycock

ADASS Budget Survey 2019

The 16th annual ADASS Budget Survey 2019 was published late last month and seems to have escaped detailed commentary. If further proof were needed that large sections of Adult Social Care (ASC) is in dire trouble it’s here.

The ADASS Budget Survey 2019 contains some very important headline messages:

  • Expected Council total net budget for 2019/20 is £39.9bn

  • This is a £7bn reduction in adult social care funding since 2010

  • In 2019/20 English local Councils are spending 38% of their budget on social care (34% in 2010/11)

  • But for 2019/20 the percentage of Council funds spent on adult social care is set to fall slightly for the first time since 2010

  • Significant increases in hospital attendances and admissions are leading to increased ASC need

  • 74% of ADASS Directors said they felt fairly/very pessimistic regarding the financial state of the wider health and social care economy over the next 12 months

  • Key drivers of rising pressures include demography, more complex resident needs and the National Living Wage (the latter costing Councils an additional £448m)

  • ASC is competing against retail and hospitality sectors in its ability to recruit staff with challenges from Brexit (7% of adult social care staff come from the EU)

  • The market is fragile and failing in some parts of the country

  • ASC is at a significant crossroads. The future policy direction for ASC remains unclear with the Green Paper having been delayed six times.

  • The biggest concerns about future financial pressures were: o Unit price for care packages for complex needs o Demographic pressures o Staffing costs (NLW) o Reducing capacity driving up costs o Sleep-in costs

  • The majority of Councils are increasing fees between 3% and 4.9% for the third year in successions, with a significant number increasing fees by more than 5%.

  • Higher fees paid ‘almost certainly doesn’t improve the financial sustainability of providers- it’s simply gives them an increase in line with this year’s costs pressures’

  • We suspect the real impact of the NLW is to increase fees by 4%

  • Care workers need to be paid more and treated better. The NHS offers its lowest paid staff across England pay rises of up to 29% over three years from March 2018. There are understandable concerns about both recruitment and retention of care staff in the ASC.

  • ASC providers are already struggling to recruit and retain staff and has a vacancy rate of 8%, compared with 2.6% across the economy.

  • c33% of English Councils reported closures of nursing and residential care homes. The reasons for the closures are unknown, but likely to include the inability to make enough money from Council funded services, poor business practices, and in some cases, the desire to realise the property value or quality issues.

So, what message does the latest ADASS Budget Survey deliver to care sector professionals and care operators? It’s that a care home needs two basic elements to do what it says on the sign by the front gate. First is regulatory compliance (and everything that goes with it) and second is a well-run business able to respond to varying economic/commercial challenges ensuring it will be there in 5-10 years’ time.

If you look at most care sector articles and lists of independent care management consultants, one thing jumps out. It’s that regulatory compliance features to the virtual exclusion of maintaining a commercial lean and well-run care business. Where I come from (banking, commerce and turnaround/recovery) you simply can’t have one without the other.

If you want to learn about how HeadWindsCare commercial and operational services meet this need, then please call Bryan Higgins on 07778 334077.