Councils buckling under soaring care costs

National insurance hike is "self-defeating" and "foolish." "Dramatic rise in care costs has left council budgets at breaking point."

By Lucy Johnston, Health and Social Affairs Editor of the Sunday Express

15:35, Sat, Jan 25, 2025 | UPDATED: 15:35, Sat, Jan 25, 2025

Nursing care costs rose 82 percent in last decade

Nursing care costs rose 82 percent in last decade (Image: Getty)

Councils are being forced to fork out £53,352 a year per pensioner in nursing care costs—a staggering 82 percent increase compared to 2015/16’s £29,276 annual rate.

The figures, uncovered by the Liberal Democrats, paint a dire picture of the state of adult social care in the UK, with the party urging the government to reverse a controversial national insurance hike they claim is “self-defeating” and “foolish.”

The news figures show that in weekly terms, spending on nursing care soared from £563 in 2015/16 to £1,026 in 2023/24, outpacing inflation by 7 percent. Had costs risen in line with inflation, councils would now be spending £3,328 less per pensioner annually.

The figures, gathered from House of Commons library data, reveal the crisis has deepened dramatically in recent years. From 2021/22 to 2023/24 alone, costs jumped by 27 percent—more than £200 per week per pensioner.

The Lib Dems say the dramatic rise in costs has left council budgets stretched to breaking point. The figures will add more pressure on councils which are already facing the prospect of having to decide if they need to cut key services due to severe financial challenges.
Over the past decade and a half, the ballooning costs of social care - which account for up to 80 percent of council costs - have already seen vast cuts to other council services. Experts believe many authorities could be forced to sell land, buildings and other capital assets, as well as cut back vital services like rubbish collection and recycling, libraries, public toilets and leisure centres even further.

Experts also believe the rising costs of nursing care will elderly people and loved ones as it will mean those deemed to have sufficient savings to pay for their own care - more than £23,250 in savings and capital - will be forced to pay higher prices as they will have to cross subsidise the council places.

Liberal Democrat Treasury spokesperson Daisy Cooper MP said: “Our social care sector is on the brink of collapse. Years of Conservative neglect have pushed council budgets to the edge, leaving too many people without the care they need. This national insurance hike is a hammer blow—forcing costs higher and driving councils and care providers into turmoil.”

The figures paint

The figures paint "dire picture of adult care" (Image: Getty)

William Laing, one of the UK’s leading experts on health and social care, said: “Local authorities and central government have been unable and unwilling to pay for the sustainable costs of care homes. These rising costs will lead to endemic cross subsidisation from private payers who will be unfairly subsidising the public sector.”

Mr Laing, from the care consultancy firm Laing and Buisson added: “This is the only way the care sector can be sustained.”

Former pensions minister Baroness Ros Altmann said: “These futures are yet more proof that the British social care system is in deep crisis and leaving vulnerable people at risk. Especially the elderly. The exemption from National Insurance cost rises should be applied to social care as well as the NHS but so far the care providers have not been treated properly. The added costs aer enormous and the system was already underfunded before. Council costs have gone up sharply but that is not all. Councils do not pay the full cost of care for older people and those paying privately have to pay even more to subsidise the council underpayment.”

The Nuffield Trust, a leading think tank, said the combination of tax and wage hikes announced in the latest budget could prove catastrophic for care providers, leaving large parts of the adult social care market teetering on the edge of collapse.

“Without additional funding from central government, this financial pressure could see not just isolated closures, but entire swathes of the care market disappearing,” said Natasha Curry, deputy director of policy at the Nuffield Trust. The think tank estimates care providers face an additional £2.8 billion in costs from next April, while councils struggle to meet their share of rising contract fees.

The Liberal Democrats are calling on the government to urgently complete its social care review—currently set to take three years—and to scrap the national insurance hike for care providers. “Ministers risk repeating the same mistakes of kicking the can down the road while vulnerable people pay the price,” said Ms Cooper.

Baroness Ros Altmann, 'social care system in crisis'

Baroness Ros Altmann, 'social care system in crisis' (Image: Getty)

Charities and care providers have echoed her warnings, citing 131,000 vacancies in the care workforce - the equivalent of 8 percent of all roles - and an estimated two million people in England estimated to be living with unmet care needs.

Nadra Ahmed, co-chair of the National Care Association, said: “The increased financial burdens put upon providers will have catastrophic consequences for those who rely on social care support.”

According to the think tank Demos, English local authorities spend around two-thirds of their budget on adult and child social care. For some, the proportional spend exceeds 80 percent.

“It’s completely unsustainable,” said Andrew Walker, lead researcher at the Local Government Information Unit (LGIU).

A spokesman for the Department of Health and Social care said: "We are making available up to £3.7 billion extra for local authorities next year. We are also investing in an extra 15,000 home adaptations to support disabled people to stay in their homes, and raising carers allowance by approximately £2,000 a year. The Casey Commission will work to build consensus around the future of adult social care that is fair and affordable. The first report will be published next year and set out the immediate action this government should take to lay the foundations of a national care service."

Social care is on the brink of collapse. The need for urgent action is blindingly obvious. And yet, it’s being kicked into the long grass once again.

Time and again, I hear yet another heartbreaking story of someone struggling to access the care they need, only to find a service that is stretched to breaking point.

The impact cannot be overstated. Without social care, extremely vulnerable people are left without the support they need for day to day tasks - like having a bath, brushing their hair, taking their medication or cleaning their sheets. All things that give individuals a sense of dignity and freedom to live their lives as they choose.

But social care is also so much more than that. Care workers often form close relationships with the people they care for and are often the first ones to notice when someone’s a bit more forgetful, a bit ‘out of sorts’ or ‘acting up’ - signs that someone’s condition may be deteriorating, or that they need urgent physical or mental health support.

Yet, governments have failed to grasp just how important social care is for millions of people. They’ve failed to fix it, failed to put in on a firm footing and allowed it to reach breaking point.

The Conservative’s Boris Johnson stood on the steps of Downing Street and promised to fix social care for good, but that party did nothing but kick the can of social care reform down the road - so far in fact that it's been dented beyond belief.

The new government is now making the same mistake.

Last year, a survey found that four in 10 social care providers had reduced their services due to financial pressures. One in five reported that they were making redundancies and caring for fewer people.

If similar figures were being reported about anything else you can be sure that Ministers would be moving at speed to turn it around. But with social care, the default decision has been to put it in the ‘too-difficult pile’.

The £600 million offered at the Budget will be wiped out by £900 million in costs for social care due to their jobs tax. It will lead to more redundancies, less social care offered and a worse experience for millions.

And local councils, which provide or commission social care services, are now on the brink of bankruptcy. Adult social care is now the single largest area of council spending, accounting for 39%. Once children's social care has been taken into account, it means that spending on other essential services like potholes has been squeezed to less than 40% of total spend.

There is simply no good reason for the government to set up a social care review lasting three years when everyone knows it could be completed in one.

Without the government scrapping their jobs tax and completing this social care review this year, more of these vital services will be lost. For those who are in desperate need of care - those who rely on the gentle care of others to help them live their everyday lives - we cannot allow that to happen.

Daisy Cooper, Deputy Leader of the Liberal Democrats and Liberal Democrat Treasury spokesperson.

care home costs leave councils at breaking point