Care England Calls for Urgent Action to Address Social Care Funding Gap in Autumn Budget

Care England, the leading voice for adult social care in England, urges the government to prioritise adult social care investment in tomorrow’s Autumn Budget.

Ahead of the announcement, Care England is drawing attention to the sector’s underfunding, citing stark new evidence of both the unsustainable funding gap, yet the compelling economic benefits which encourage investment in adult social care.

Professor Martin Green OBE, Chief Executive of Care England, commented:

“The evidence is unequivocal. The gap between the rates provided by the Market Sustainability and Improvement Fund (MSIF) and the Fair Cost of Care (FCoC) is not only widening but accelerating the risks for providers, residents, and the broader healthcare system. This shortfall threatens to destabilise the sector, leaving care providers unable to meet rising costs and continue delivering vital services. The government must act decisively to close this gap and stabilise the social care sector.”

Funding Shortfall in Care Provision

In addition to the Homecare Association gap of £1.76bn for Homecare, Care England’s recent analysis shows a £2.2 billion shortfall for residential care between the MSIF rates for 2024/25 and the FCoC, a gap that has grown by £400 million in the last year alone for residential care. This underinvestment has left providers unable to cover increasing operational costs, with nearly 40% of residential care providers now having considered exiting the market in the last year. Such a loss would further strain the NHS, which already attributes 45% of its discharge delays to the shortage of suitable care placements.

Despite local authorities’ critical role in funding and overseeing care services, they receive insufficient funds from central government to meet the real costs of care with nearly 1 in 4 close to serving Section 114 notices. For those providers who depend on local authority funding to cover essential care, the current funding model creates an unsustainable financial equation: absorb rising losses or face potential closure.

Professor Martin Green OBE continued:

“The MSIF was a step in the right direction, but the funding levels are insufficient to meet the real costs of care given the steep rise in the NMW by 9.8% this year. This shortfall jeopardises access to high-quality care for our residential care population and places undue pressure on the NHS. The solution lies in a commitment to properly fund adult social care, allowing local authorities and providers to sustain the quality and availability of services.”

Investment in Social Care Drives Economic Growth

Investing in adult social care not only addresses the immediate funding crisis but also delivers significant economic and societal benefits. The sector contributes £68.1 billion to the economy, reflecting a remarkable 13.2% growth in the past year alone. With a return on investment (ROI) of 175%, every £1 invested in adult social care yields £1.75 in economic return.

While estimates suggest that the sector requires upwards of £10 billion in funding to bridge the gap between average fee paid and the cost of care and to pay staff at a level commensurate with their role, this investment promises an additional £7.5 billion in economic benefits. Moreover, the positive impact is particularly pronounced in regional economies, especially in the North and Midlands, where adult social care jobs are vital for stimulating local spending and supporting community development.

Professor Martin Green OBE added:

“The evidence supporting investment in adult social has never been more compelling. Not only does it strengthen community health and reduce NHS pressures, but it is also a powerful economic driver where money is needed. This Budget is an opportunity for the government to choose a path that supports both vulnerable individuals and local economies across the country.”

Care England calls on the government to take the following actions:

• Immediately Close the Funding Gap: Allocate adequate funds to ensure that local authorities can cover the true cost of care.
• Implement Multi-Year Funding: Establish a stable, inflation-linked funding model for a minimum of three years to provide security and sustainability for care providers.
• Capitalise on Economic Potential: Recognise adult social care’s high ROI and its capacity to drive growth in economically disadvantaged regions.

Professor Martin Green OBE concluded:

“Tomorrow’s Budget is a pivotal moment for the future of adult social care. The government must seize this opportunity to support a sector that is vital to our communities, our economy, and our NHS.”

For more in-depth insights into these critical issues, we encourage readers to explore our full briefings:

• Understanding the Shortfall Briefing, which provides a comprehensive overview of the funding gaps within the sector. Click here to read.
• Why Invest in Adult Social Care Briefing, highlighting the substantial economic returns from investing in adult social care. Click here to read.
• Care England’s Submission as Part of Their Budget Representation, outlining our recommendations for a sustainable future. Click here to read.

Together, these documents underscore the urgent need for government action to secure the future of social care.