Budget debate: Fixing the NHS and reforming public services, House of Commons, 5 November 2024

• It is encouraging that the Chancellor has announced £1.3 billion of extra funding, through the local government finance settlement, for the next financial year. Together with council tax flexibilities and locally-retained business rates, this will provide a real-terms increase in total core spending power in 2025/26 of around 3.2 per cent. This will help meet some, but not all, of the significant pressures in adult and children’s social care and homelessness support.
• Other measures announced in the Budget for our sector, including the Extended Producer Responsibility, special educational needs and disabilities (SEND) uplift, Household Support Fund, Bus Service Improvement Plans funding, local roads maintenance, resource funding for homelessness pressures, and the Kinship Allowance pilot represent over £4.5 billion in additional funding.
• This is a step in the right direction, but councils and the services they provide to their residents still face a precarious short and long-term future. The Government needs to give explicit clarity on whether councils will be protected from extra cost pressures from the increases to employer national insurance contributions.
• Only with greater funding certainty through multi-year settlements and more clarity on financial reform, can councils protect services, meet the needs of residents and work in partnership on the Government's priorities, from social care to housing, inclusive economic growth and tackling climate change. We look forward to continuing to work in partnership with the Government to address these issues for councils and communities.

Funding reform

• We are pleased the Government has acted on our long standing asks and committed to introducing multi-year settlements from 2026/27. We are also pleased that the Government intends to pursue a comprehensive set of reforms to return the sector to a sustainable position. We want to work with Government on these reforms.
• The Government should provide certainty and clarity over financial reforms including the nature of the redistribution of funding, business rates reset, the Fair Funding Review (FFR), and reforms to other grants such as the New Homes Bonus, making sure the sector is properly engaged and consulting on any potential changes in a timely manner.
• We consider that the Government review both the formulae and the underlying data used for the assessment of relative needs and resources. Transitional mechanisms should provide sufficient funding to ensure that no council experiences a loss of income.
• The Government should clarify its plans for, and the timing of, any reset of accumulated business rates growth at the earliest opportunity as part of a broader effort to provide certainty to the sector on planned reform. The Government should introduce a transitional mechanism as part of any reset of accumulated growth, to ensure that local authority services that residents rely on are not put at risk.

Exceptional Financial Support

• The sheer number of councils that have been allowed to capitalise revenue spending under the Exceptional Financial Support scheme demonstrates that there is clearly an ongoing need for additional financial support for some councils.
• Our recent survey of council Chief Executives found that one in four councils in England are likely to have to apply for emergency government agreements to stave off bankruptcy in the next two financial years.
• In our view, there is a risk that the system as currently designed could potentially load struggling councils with further debt and/or undermine future capital programmes by burning through councils’ capital receipts. In this context the Government should assure itself, and councils, that the current Exceptional Financial Support is achieving its objective of supporting councils in returning to financial sustainability in an efficient and effective manner.

National Insurance

• The Government is increasing the rate of employer National Insurance contributions (NICs) from 13.8 per cent to 15 per cent and reducing the per-employee threshold at which employers become liable to pay National Insurance (the Secondary Threshold) from 6 April 2025 to £5,000. The Government needs to give clarity on whether councils will be protected from extra cost pressures from the increases to employer National Insurance contributions for directly employed and contracted out services.

National Living Wage

• The LGA welcomes the increase in the National Living Wage (NLW). However local authorities must be sufficiently funded to meet the additional costs to avoid adding unsustainable additional pressures to local public services.
• Looking beyond 2025/26, local government also needs as much certainty as possible as to what the NLW rate is going to be, in order to plan effectively for any future increases. There is currently too much uncertainty in the process, with Budget’s announcement the latest example of an increase at the higher end of ever-changing projections.
• We strongly urge the Low Pay Commission to put predictability and certainty for employers at the heart of their recommendations to government for the future National Living Wage to enable employers to plan for and manage rises more sustainably.

Budget reaction on health funding

• Health is about more than healthcare, and local councils are vital in addressing the wider determinants of health, through their role in housing, green spaces, youth services, and the local economy. They plan, commission and provide essential services like social care, public health and children’s services, all of which are key to improving population health and preventing ill health.
• We are pleased the Government has acted on our call to increase Affordable Homes Programme funding. Ensuring people have good housing can help to delay or reduce a person’s need for health and care services in the future and help them retain their independence, health and wellbeing for longer.
• To effectively reduce pressure on healthcare systems, improve health outcomes and tackle inequalities it is vital to involve local government in shaping the upcoming 10-year plan for health. Reforming social care and investing in local government services are essential for a healthier population and a sustainable NHS. Local government must be integral in developing the solutions.
• Public health grants fund essential local services that help keep communities healthy. LGA analysis has found that, between July 2015 and 2024, the Public Health Grant received by councils has been reduced in real terms by £858 million (in 2022/23 prices). This has resulted in reductions in councils' ability to spend on public health commissioned services.
• Public health teams have faced an unprecedented period of pressures, with funding levels not keeping pace with demand. Sufficient ongoing funding is needed to ensure all local authorities can continue to meet their statutory public health responsibilities. It is vitally important that the Government continues to address challenges which arise over the coming months and years.
• We are disappointed there was no new funding announced for public health and we will continue to make the case for multi-year settlements and for more long-term certainty around public health funding for all councils. An increased focus on prevention through an uplift to the public health grant is urgently needed, as well as a wider review of the adequacy of public health funding. This will support the Government’s wider aims by improving health outcomes, reducing health spending and putting social care and the NHS on a better footing for the long term. In addition, we note that there has been no announcement about supplementary funding for drug and alcohol treatment and recovery services, with current funding due to end in March 2025. The fast-approaching deadline without certainty of an extension is starting to impact on delivery of vital locally led programmes. Vital funding used to engage more individuals into substance use services should be extended to avoid a cliff edge in support for councils and vulnerable residents.

• At its best, adult social care helps ensure that everyone can pursue the things that matter most to them, irrespective of their age or conditions. Yet this core purpose of adult social care, and its intrinsic value to us all, is not well enough understood. Changing this could help unlock more public support, making it possible to spread the very best practice that exists across the country.
• There must be joint work with the Government to reform – in coproduction with people drawing on care and support – the approach to adult social care, and better joint working between the NHS and local government to support people. In particular, a focus on prevention and recovery services is needed. Investment in primary and community services and intermediate care that is multidisciplinary and can resolve crises in health and care would mean avoiding hospital admission and helping people convalesce. More therapeutic-led reablement – intensive short-term interventions with follow-up support – will support recovery after time spent in hospital.
• The LGA’s White Paper revealed that councils in England now face a funding gap of £6.2 billion over the next two years. Adult social care must be funded adequately, sustainably and with trust in councils as democratically accountable bodies. The exact funding requirement should be identified through a collaborative process, but we broadly support the Health Foundation’s analysis of the uplifts that would be required to tackle some of the most pressing issues facing people and the sector, such as access/unmet need, meeting future demand, and covering the full cost of care.
• There must be support for the voluntary sector, which can mobilise quickly and provide access to an additional workforce. Services such as ‘sitting services’ (which provides reassurance for people who may not need care but are concerned at being alone after discharge), unpaid carer support, handyperson services, and home from hospital services can all play a key role in meeting low-level needs after discharge, as well contributing to preventing possible readmission.
• Increased care worker pay – including one-off increases and/or retention bonuses – will help tackle the serious recruitment and retention issues facing the sector. The costs for any such increases must be met in full by genuinely new funding from central government and we look forward to working with the Government on its Fair Pay Agreement and Employment Rights Bill.
• Robust commissioning arrangements must be put in place to ensure that the commissioning system does not create two tier systems and lead to disagreements between councils, the NHS and the care sector.

Budget reaction: adult social care

• We will need to see further detail on the £600 million for social care, as well as on council tax increases and the council tax precept. The Government must provide clarity that the £600 million will be an increase to the Social Care Grant, which councils have freedom to allocate between children’s social care and adult social care. In recent years, councils have allocated around 60 per cent of the grant to adult services.
• While the additional funding is welcome, it must be seen in the context of the announced increases to the National Living Wage and employers’ National Insurance contributions. With no separate funding for these announcements, care providers will likely expect to see their increased costs reflected in their fees paid by councils. This will almost certainly absorb all of the grant increase for many councils even if it is spent wholly on adult social care, leaving little or nothing to address immediate challenges in adult social care, such as long waiting times for an assessment of a person’s care needs or the commencement of care packages.
• The additional funding for social care must also be seen in the context of the extra £22.6 billion investment announced for the NHS. This is crucial and much-needed investment for our health service and will help lay the foundations for the 10 Year Plan. But the challenges facing the NHS, and how to address them, are inextricably linked to the fortunes of adult social care and support and other local government services. As it stands, the NHS has a process in place for developing a plan for the future, backed up by significant increased investment; adult social care does not yet have either.
• Given the Government’s emphasis on shifting from treatment to prevention, it is disappointing not to see specific funding to take forward activity aimed at preventing, reducing or delaying the onset of more acute and costly needs for care and support.
• People drawing on adult social care, and the wider sector which supports them, continue to call for proper reform of care and support so that everyone is able to live their best life. It is therefore disappointing that adult social care is not listed as a priority area for reforming the public sector under Phase 2 of the Spending Review.
• We are highly supportive of an increase to the Disabled Facilities Grant. Councils are working hard to provide housing adaptations and mobility aids which are vital to help keep people safe and independent in their homes and prevent avoidable admissions to hospital and care homes. This extra funding will enable councils to deliver even more of this life changing work.
• We would support and encourage Government to consider a consultation on raising the £30,000 cap on Disabled Facilities Grant applications for households with significant needs to take even more pressure off Adult Social Care budgets. This cap has not been reviewed since 2008 despite rising costs in the sector.

Royal Commission on the future of adult social care

• The LGA wants to work closely in partnership with Government on plans to stabilise, strengthen and reform adult social care and support for the long-term. A Royal Commission could be a way to achieve this. But the pace of the Commission’s work will be crucial; time should not be spent diagnosing the problems and identifying solutions given so much work on these two components has already been done. Challenges and their consequences are gripping the service, people drawing on care, and the workforce, now.
• We therefore urge the Government to set a rapid timetable for the work (akin to the Hewitt Review), with clear milestones and early engagement with local government to draw on councils’ expertise and experience.
• Action is needed now, particularly if the full value of adult social care and support (and local government more generally) is to play into the immediate mission of building an NHS fit for the future. Any delay to proceedings risks further negative impacts on people drawing on care and support or people needing to do so and the workforce.

National Care Service

• Our current system of adult social care already marries national and local inputs. For instance, we have a national framework for eligibility and now a national system of CQC-led regulation of councils’ performance against their Care Act duties. This exists alongside delivery of care and support which is overseen locally by local government, whether that be through direct provision or commissioned services.
• Councils work extremely closely with numerous local partners to build an ecology of care and support and wellbeing that plays to the strengths of each area’s unique circumstances.
• A National Care Service (NCS) must not be seen purely in terms of what it could deliver for the NHS. Though obviously linked, we would want a NCS to take, as its starting point, full recognition of the huge value of great adult social care to people and communities. A NCS is also an opportunity to rethink how we support and improve people’s wellbeing in the wider sense. In this way, we would want to see a real emphasis on prevention and early action at the heart of plans for a NCS.
• Local government is a willing partner on all aspects of reform and stands ready to share its expertise and discuss options with the Government. Central to developing a NCS will be identifying priorities for immediate-, short-, medium- and longer-term action. Councils’ perspectives on this crucial part of the debate will be invaluable in shaping a NCS that makes the most progress most quickly. The LGA and councils should therefore be an essential partner in the design of a NCS from its outset.

The future of CQC assurance of adult social care

• The LGA is a willing and supportive partner of all relevant national stakeholders and has enjoyed a helpful and constructive relationship with CQC throughout the development of ‘local authority assessment’. We look forward to continuing this relationship under CQC’s new chief executive, Sir Julian Hartley.
• We have previously raised concerns about the challenging timetable CQC are operating to and the difficulty of recruiting enough experienced assessment staff to meet that timetable.
• Concerns raised by Dr Penny Dash in her interim report on CQC effectiveness about the credibility and quality of assessment–cannot be ignored, CQC local authority assessment is still a very new process and building in sufficient time to reflect and learn should be seen as a valuable and natural step.
• The LGA is ready to support the regulator in its work to address the Dash review findings. The LGA already has a comprehensive peer review offer in place and has been working with a number of councils as they prepare for CQC assessment. Through this and other work, the LGA could help CQC define and describe what ‘good’ or ‘outstanding’ care looks like, as well as what different models of care could be truly classified as ‘innovative’. Sector-led improvement also helpfully plays into supporting local system accountability more broadly. This may be particularly important, depending on what happens with CQC assessment of Integrated Care Systems.
• The LGA continues to call for the ending of single-word ratings in CQC local authority assessment. From the outset, we have said that reducing such a complex and complicated service down to one word is neither possible nor desirable. With the end of OFSTED single-word ratings, it makes sense to take a similar approach in local authority assessment.

Charging reform

• The LGA continues to fully support the principle of protecting people from catastrophic care costs, but we recognise that Government faces difficult choices on competing priorities with limited budgets. In that context, councils will have welcomed confirmation earlier in the year that charging reform will now not be proceeding in October 2025. This would have been an extremely challenging timetable to work towards, with uncertainty about future funding for the reforms. In the future, councils need to be given as much notice as possible on whether reforms, such as these, are going ahead or not. This will aid councils’ planning work and avoid time and money being spent unnecessarily.

Workforce

• With a workforce of 1.52 million, adult social care is a bigger employer than the NHS (1.43 million). As the NHS and adult social care workforces are in many senses two sides of the same coin – depending on each other to deliver person-centred care and wellbeing – it is essential that any modelling of NHS workforce supply and demand aligns with, or takes account of, projected demand for the adult social care workforce. Skills for Care have estimated that if the number of adult social care posts grows proportionally to the projected number of people aged 65+ between 2022/23 and 2035, an increase of 25 per cent (440,000 extra new posts) would be required by 2035.
• Training and recruiting additional doctors and nurses is important, but so too is ensuring that local health and care systems have a sufficient – and sufficiently mixed and skilled – care workforce including social workers and domiciliary and residential care workers, and other crucial roles which support people who need support to live independently in their own homes or in their communities.
• We welcome commitments to cutting waiting lists in, and transforming the long-term workforce of, the NHS. Adult social care continues to play an important part in mitigating demand pressures on acute hospitals through effective discharge and preventative work to keep people out of hospital in the first place. However, adult social care faces its own significant waiting lists for needs assessments, care plan reviews, and the commencement of care packages. With no comparable government-commissioned plan for adult social care, Skills for Care are leading valuable work to develop a long-term plan for the care workforce. This has the potential to be a crucial foundation for engagement with government on the issues that need to be addressed.
• Whilst the People at the Heart of Care white paper (December 2021) and the Next Steps update report (April 2023) contained important initiatives for the care workforce, the latter was widely considered across the sector as a major disappointment and a watering down of ambition of the former. This includes the former’s pledge of £500m for measures to support the care workforce being halved to £250m in the latter.
• Past governments have acknowledged that the adult social care workforce is bigger than that for the NHS, yet it has nothing comparable to the NHS Workforce Plan. This creates a problem of presentational parity. The future requirements of and for the social care workforce should be a far more prominent consideration for government, both as a standalone priority and in respect of its links with NHS workforce planning. We need a new deal for the care workforce and Skills for Care’s development of a workforce strategy will be key to this.
• Clear priorities which must be included in a national workforce strategy for adult social care are: staff recognition, value and reward; investment in training, qualification and support; career pathways and development; building and enhancing equality, diversity and inclusion in the workforce; effective workforce planning across the whole social care workforce; and expansion of the workforce in roles which are designed in coproduction with people who draw on care and support, and in roles which enable prevention and support the growth of innovative models of support.
• Improving the pay, conditions and development opportunities of the care workforce is crucial for addressing long-standing recruitment and retention challenges for the benefit of people who draw on care and support, workers and our health service. The LGA notes that whilst the National Living Wage (NLW) increase announced in the Autumn Statement is of course great for care workers, it is challenging for councils’ adult social care budgets given that providers will understandably expect to see their fees increase to absorb the NLW increase.
• While not part of the paid workforce, we also recognise the invaluable role that unpaid carers and volunteers play in supporting people to live the lives that they want to live in their own homes and communities. There is ample evidence of the growing strain on unpaid carers, with many suffering ‘carer burnout’. This is troubling in itself but also risks compounding pressures on the paid workforce.
• We owe an enormous debt of gratitude to our frontline care workforce who give so much in supporting people of all ages who have cause to draw on social care. We want to see social care presented as being about ‘all of us’, not ‘them and us’. It needs to invoke shared values, such as caring about each other, rather than, for instance, ‘looking after our most vulnerable’. Similarly, we need all voices in the debate to frame social care as an investment and an opportunity, rather than a cost and a problem to be fixed.
• The LGA’s May 2024 publication on The Care Act 2014: Ten years on from Royal Assent provides a number of articles including from Skills for Care and, crucially, the social care workforce and organisations which represent them. The workforce is fundamentally important to the delivery of the Care Act’s aims, yet faces serious challenges such as on recruitment and retention, skill gaps, and morale. The articles helpfully identify what is needed to develop, build and support the social care workforce of the future.
• One of the LGA’s recommendations in the publication is that there must be recognition of there being no such thing as a ‘standard care worker’ and develop a comprehensive long-term plan for the care workforce, building on the important work that Skills for Care are leading on and which we know will be an invaluable contribution to the debate. A long-term plan must include a thorough review of care worker pay and conditions, with corresponding increases and improvements respectively. In the short-term, explore the case for one-off increases in pay, and/or retention bonuses, particularly as we head into winter.

• Support for and recognition of unpaid carers – who are the backbone of care – is crucial. Too many of these people are suffering ‘burnout’ and the labour market is losing too many people, especially those in their 50s, who are having to give up work to care. The adult social care system could not survive without the enormous contribution of unpaid carers who provide vital support for thousands of people every day.
• It is estimated that around 16.1 million people have been or are currently an unpaid carer. It is concerning that so many unpaid carers are struggling with their finances and worrying about the future when the economic value of the support they provide is a staggering £162 billion a year. Many councils rely on, and fund, local carers organisations in the voluntary and community sector to communicate to carers. Funding pressures impact on that commissioned support for carers. GPs also have an important role to play in linking carers to their local council.
• Caring can place a real strain on individuals – emotionally, physically and financially. Carers are more likely to suffer depression, anxiety and stress and nearly two-thirds of carers have a long-standing health condition. The impact is often exacerbated by carers being unable to find the time for medical check-ups or treatment. Personal relationships can also suffer and carers are more likely to be socially excluded.
• ADASS’ Spring Survey 2023 found that 91 per cent of Directors of Adult Social Services strongly agreed or agreed that unpaid carers are coming forward with an increased level of need in their local area over the past 12 months. Furthermore, 68 per cent of Directors reported an increase in referrals relating to carer breakdown in 2022/23, an increase from 65 per cent in 2021/22. Directors ranked burnout as the number one reason that has contributed to an increase in carer breakdown over the past year.
• Enabling councils to better support the increasing numbers of unpaid carers should be a crucial part of a long-term and sustainable funding solution for social care. Additional funding will allow councils to support the increasing number of carers with a range of services including to help address specific needs, such as supporting carers of people with dementia, carers from Black and ethnic minority communities and young carers.

Budget reaction: unpaid carers

• The LGA supports the raising of the Carer’s Allowance Weekly Earnings limit to allow those receiving Carer’s Allowance to start work or work more hours.
• The LGA supports the announcement of an independent review into overpayments of Carer’s Allowance. We also support the proposal to carry out further work on the earnings limit. This work should reflect the vital contribution of unpaid carers to supporting people with care needs at home and ensure they are supported to continue in their caring role.

Budget reaction: mental health

• The LGA support the investment in new mental health centres. It is important that the centres are delivered in partnership with local authorities.
• There is a clear role for local government to improve the mental health of our communities, ensuring that local, regional, and national NHS partners, the voluntary and community enterprise sector and employers work together with local communities to improve mental health.
• The LGA are calling for sustainable funding for local government statutory and non-statutory mental health services to put them on an equal footing with NHS clinical mental health services. 

Mental Health Bill

• The LGA supports the reform of the Mental Health Act and we are pleased this has been included in the King’s Speech. In our submission to the original Mental Health Act White paper in 2021, we supported the emphasis on treating people as individuals as a fundamental principle. We welcome the intention of the Act to address the rising rates of detention and experiences of people from Black, Caribbean and African backgrounds. It is important that the Act reflects the needs of people with lived experience of mental health needs.
• It is essential that the new Act clearly recognises the local leadership role of councils and identifies the roles and responsibilities of councils in respect of both statutory and non-statutory mental health duties, working in partnership with the NHS and local voluntary and community services. At implementation, it needs to reflect the impact of the pandemic which is predicted to cause an increase in new or additional mental health support (COVID-19 and the nation’s mental health).
• We strongly support the proposals to revise the detention criteria to be clearer that autism and learning disabilities are not considered to be mental disorders for this purpose, and the requirement that there must be a probable mental health cause to their behaviour that warrants assessment in hospital. We want to see people with learning disabilities and/or autism receiving personalised care in the community whenever possible. To achieve this, it is important that there is additional funding for councils and partners to support the development of alternative resources for people with autism and learning disabilities in the community.
• The Act will have significant resource implications for councils which need to be fully funded on a long-term basis. The Act needs to reflect the operational needs and resource pressures on local government, and partners, who will need to be resourced to support effective implementation. For many years mental health services at all levels have been reduced despite rising demand.
• We support investment into expanding and transforming mental health services to ensure more people can access the support they need. Investment must also include mental health support delivered by local authorities, as well as NHS services. This is particularly important as statutory local authority adult mental health services are funded from the social care budget.
• We need a system wide focus on early intervention and prevention. Intervening early to prevent mental health problems developing, or to treat and support children’s, parents and families before problems progress is essential.
• The success of the new Act will require the NHS and councils working in partnership. More needs to be done to fully embed mental health into integrated care teams, primary care, urgent and emergency care pathways.
• Commissioning of mental health services should reflect local needs and knowledge; the process should not be overly prescribed by central government. It is important that any crisis Improvement programme makes links with the mental health role of councils, not just the NHS.
• A clear workforce strategy for both the adults and children’s workforce is required. This should look at recruitment and retention of Approved Mental Health Professionals, increasing the workforce in the key pressure areas and in early intervention and prevention spaces and at developing an appropriate training plan for workforce to make sure that mental health is everyone’s business.
• There are clear links between poor mental health and health and racial inequalities. Children from low-income families are four times more likely than those from the wealthiest households to have a serious mental health difficulty by the time they leave primary school. Unemployment and poverty are strongly associated with poorer mental health and a higher risk of death from suicide. And rates of mental health problems can be higher for some black and minority ethnic groups than for White people.
• Councils are key to identifying and addressing the intersectionality between health inequalities, protected characteristics, socioeconomic deprivation and poor mental health, however, resources limit the work that councils can do. The Centre for Mental Health in its Commission for Equality in Mental Health recommended that councils need an urgent funding boost to coordinate action to pursue mental health equality. We need recurrent long-term funding in councils so that children’s, adults and public health services can meet existing, new and unmet demands to combat mental health problems.

Arian Nemati, Public Affairs and Campaigns Adviser

Email [email protected]