Research and analysis

Evidence review for adult social care reform: summary report

Published 1 December 2021

Applies to England

Introduction

The evidence review for adult social care reform is being published alongside People at the Heart of Care. Its main purpose is to outline trends and challenges based on the current (as of 1 December 2021) adult social care system in England.

It is a technical paper summarising the existing evidence that has informed the development of policy proposals. Data and evidence are presented on:

• changes in the numbers of people with care needs and the nature of those needs
• current levels of formal care
• the interface with wider systems, such as the NHS, housing and benefits
• important factors influencing the resilience of the current system, including:
  • characteristics and availability of unpaid care
  • challenges in the providers’ market
  • workforce pressures

Evidence is strongest concerning demographic change and how this will substantially increase demand for care, though this will vary across the country and between socio-economic groups.

The specific impact of charging reform announcements will be explored more fully in the forthcoming impact assessment.

The evidence review has been produced in collaboration between the Department of Health and Social Care, and the Government Office for Science, building on the Future of an ageing population foresight report.

Why demand for care is rising

Demand for social care is estimated to be rising in both the older and under-65 population. According to the Office of National Statistics, the population in England is ageing rapidly and lower levels of net migration would increase the rate of population ageing further.

Population ageing is the result of a long-term decline in fertility rates, which has coincided with people living longer. Overall numbers of over-65s are increasing, partly due to longer life expectancy and partly driven by the large post-World War II birth cohorts entering later life.

Although the latest data – which includes the higher mortality observed in 2020 during the coronavirus (COVID-19) pandemic – suggests a decrease in life expectancy for the period 2018 to 2020, it is too early to say what the impact of this will be on long-term trends in life expectancy.

The extra years of life are not necessarily being spent in good health. As more people live to older ages, more of us are living with illness and disability, often with complex comorbidities and more challenges in managing everyday life.

Of an estimated 10 million over-65s in 2018, 36% of people aged 65 to 74 have a limiting illness or disability, rising to 55% for those 75 years or older. For adults aged 20 to 64, this figure is 19%.

It is projected that the number of over-65s with multiple conditions and disabilities will continue to grow. The number of over-65s needing help with one or more daily living tasks is projected to increase by 48% over 20 years: from 3.5 million in 2018 to 5.2 million in 2038.

Stroke, cognitive impairment, arthritis and visual impairment have the biggest impact on the number of years over-65s live with disability. Comorbidities may become an increasingly pertinent issue, with obesity and dementia contributing to the numbers of people living with comorbidities.

The proportion of adults under 65 with a disability has risen in recent years. One reason for the increased demand for care in the under-65 population is the increased proportion of people with a learning disability, following improvements in diagnosis and reporting of a disability, and increased longevity and improved survival of premature babies. It is projected that there will be a sustained growth in social care needs for adults with learning disabilities between now and 2030.

Old age dependency ratios vary widely between regions, as do the socio-economic factors associated with high disability and morbidity rate. Old age dependency ratios are significantly higher in rural and coastal areas. In some regions, ratios are projected to rise to over 500 people over 65 years old per 1000 people under 65 by 2041.

Disability affects twice as many people in the most deprived areas as in the least deprived. There is a similar pattern for multi-morbidities, with people in more deprived areas becoming ill earlier and more likely to experience mental health disorders.

The resilience of the different aspects of adult social care to present and future pressures

The resilience of adult social care is affected by both the characteristics and availability of unpaid care – and how that might change over time – and by different aspects of the formal care system:

• availability of care home and home care provision
• the impact of people funding their own care
• workforce pressures
• productivity
• the use of technology

Unpaid carers support millions of people in meeting their care needs. Growing numbers of people, especially in the 50 to 70 age group, are providing care to family members or others close to them. In 2011, the Census indicated 5.4 million people in England provide care to a family member or a friend, equivalent to around 10% of the population.

However, factors such as people having fewer children later, a higher proportion having none, and rising female employment all seem likely to reduce the number of people able to provide unpaid care.

Providing unpaid care, particularly at high intensities, impacts individuals, society and the economy. The extent of these impacts can vary depending on the needs of the person being supported, and on the circumstances and experience of the person providing care. There is evidence that COVID-19 created further demand for unpaid care, with many millions more people providing unpaid care during the pandemic than previously.

Both the care home and home care market (intended in its broader sense, for example including supported living) face significant financial and workforce pressures.

This is particularly the case following the impact of COVID-19, where older people’s care home occupancy is recovering from an approximate 10 percentage point peak reduction, and has imposed new costs on providers, albeit with increased government support such as the Infection Control Funds.

There is significant variation in provider profitability across regions. This has been linked with variations in how far providers rely on publicly funded clients. In some regions, providers are reliant on a high proportion of local authority-funded clients because lower home ownership rates and house prices mean that more people fall below the means test threshold for paying for their own care.

Precise data on the number of people funding their own care is not readily available, although it is likely to be changing substantially with the announcement of charging reform. The Office of National Statistics estimated that, between 2019 and 2020 (pre-pandemic), around 37% of care home residents were self-funded (143,774 residents).

There was significant regional variation in the share of self-funders. Care homes located in the least deprived areas had a statistically significant higher proportion of self-funders than care homes in the most deprived areas. In addition, the data showed some relationship between a higher proportion of self-funders in a care home and better-quality ratings.

In common with other low-paid occupations, social care experiences high rates of workforce turnover and vacancies as well as relatively low uptake of technology compared with other industries. Wages have been rising in line with the National Living Wage, although the wage differentials paid to staff with greater experience and responsibility have become compressed over time. There are limitations to measuring productivity growth within the care industry but the Office of National Statistics’ quality-adjusted approach suggests that there has been little improvement in the recent past.

The social care sector has historically been a relatively low-productivity growth and low-pay sector. While there are methodological difficulties in measuring adult social care productivity, available measures suggest this has declined over time. Low levels of uptake of technology and innovation are one potential reason for low productivity in the sector. Other industries have been quicker than the social care sector to adopt and scale up technologies that have transformed their business models.

There is potential for improvement, though evidence of what works is currently limited.

Interface with wider systems

The health and social care systems work closely together, but pressures can arise, leading to adverse impacts such as delayed transfers of care. Government policy is driving closer integration of the two systems, with some evidence of positive impacts on quality and outcomes for patients, but so far there is less evidence of cost-effectiveness. There is some research indicating a link between social care spending and NHS performance, but more research is needed to strengthen the evidence base.

Poor or unsuitable housing is a public health risk and can limit independent living for both over-65s and adults under 65, creating pressures on the NHS and social care. The cost of poor housing to the NHS has been estimated at £1.4 billion a year, largely due to excess cold and falls. Over-65s are more likely to live in a home that does not meet decent home standards.

Specialist housing and adaptations can help prevent and reduce care needs. On average, home adaptations delay the move to residential care by 4 years. However, demand exceeds supply and adaptations in rental properties require landlords’ agreement. Projected demand for adaptations and specialist housing are expected to rise.

Uptake of technologies to support independent ageing is happening, but is patchy, with variable information on available options and services. Poorer households with the highest needs may need more support to benefit from technologies.

Future demand and individuals’ resources

The total number of adult social care users in England is projected to increase by 50% between 2018 to 2019 and 2038 to 2039, from 980,000 to 1,470,000.

While long-term projections are uncertain and should not be treated as precise forecasts, the Care Policy and Evaluation Centre project that expenditure (public and private) under the current unreformed system would likely need to increase by more than double in real terms, from £28 billion to £56 billion (2018 prices) over the same period in order to keep pace with the increases in demand and unit costs.

The median lifetime cost of care for over-65s (excluding ‘hotel’ and accommodation costs) is approximately £22,000. The mean is approximately £45,000. Costs exceed £100,000 for around 1 in 7 adults over 65.

There are several significant barriers that have prevented the development of voluntary products to enable individuals to protect themselves against these high care costs. Supply-side barriers include:

• uncertainty about the future unit cost of care
• the length of time individuals will need care
• the risk of adverse selection

Demand-side barriers include:

• public misconceptions over who pays for social care
• optimism bias
• the tendency of individuals to think more of immediate benefits when making decisions

The wealth of older-age cohorts has been increasing in recent years but is peaking and it is not evenly distributed. Changes in wealth accumulation have been driven by a number of factors, including reduced access to relatively generous defined benefit pension schemes and reduced savings. Home ownership has been a key asset base to contribute to care costs, but this might vary over time depending on house prices and patterns of home ownership. There are important regional and socio-economic differences in the distribution of income and assets, with significant variations by age, gender and region.

Conclusion

This evidence review collates a wide range of evidence on challenges and changes facing social care and what is driving them.

The evidence shows that both the absolute number of over-65s, and the proportion of the population they represent, is growing. This is a success to be celebrated. However, as people live longer, many are spending more years with complex health needs or disabilities. Similarly, there is an increasing number of adults under 65 with disabilities requiring long-term support.

The total number of users of long-term adult social care in England is projected to increase by 50% between 2018 to 2019 and 2038 to 2039 to keep pace with underlying demand. This would mean total expenditure on adult social care services under the current unreformed, system would more than double in real terms.

Our evidence shows significant variations both in care need and system capacity across the country. There is also significant variation in health and disability between socio-economic groups, and growing pressure on unpaid carers.

Of the themes discussed in this document, there are areas where the evidence is less developed. Evidence gaps include:

• understanding how people fund their own care
• how care decisions are made
• individual’s needs and the extent to which they are met
• the type of care unpaid carers will be able or willing to provide, and how they can be most effectively supported
• the impact of medical advances and technological innovations
• precise data on the number of people funding their own care, particularly for adults aged 18 to 64 years

There are also uncertainties around the impact of COVID-19.

Within the evidence gaps, there is a need to develop our understanding of inequalities within the social care system by exploring disparities in access, outcomes and experiences of different groups. There also remain gaps in our understanding of how current trends will interact and change over time.

Annex – Background

Introduction to adult social care in England

About a quarter of the adult population in England has a self-reported disability.

In general, care needs increase with age. The proportion having a self-reported disability is 18% for adults under 65, rising to 45% for adults aged over 65 and 66% of those over 85.

Self-reported disability does not necessarily lead to care needs but can do if the disability limits people’s ability to undertake everyday activities.

People receive different types of care, including both formal and unpaid care from family and friends.

Funding for adult social care comes from private and public sources. Core public funding includes revenue funding from central government to local authorities (not ring-fenced), locally generated income and income from user charges.

Spending on adult social care in 2020 to 2021 was estimated to be over £38 billion from various sources, with individuals contributing around £12 billion. Individuals contribute either as self-funders or by paying means-tested charges for assessed local authority support.

While there are more over-65s in receipt of adult social care than adults under 65, formal care for the latter can be more expensive, for example due to more intensive needs or because care is provided for a longer period.

The estimate of total adult social care expenditure does not include the significant contribution of unpaid carers. A variety of estimates exists for the value of unpaid care provision. The Office for National Statistics estimated that the gross value added of unpaid care in the UK was £59.5 billion in 2016. Buckner and Yeandle (2015) estimated that the economic value of the contribution made by unpaid carers in the UK was £132 billion in 2015 (£108 billion in England).

Access to care, quality and satisfaction with services

The Care Act 2014 sets out local authorities’ duties in relation to assessing people’s needs, and their eligibility for publicly funded care and support.

There are many reasons why individuals who have some need for support with their daily activities may not receive formal or informal support. Some stakeholders call this ‘unmet need’. Understanding the number of people with social care needs who are not receiving support, and how these numbers are changing over time, is challenging. There is no agreed definition of ‘unmet need’, either in the Care Act or the research literature.

Due to these challenges, evidence on the number of people not receiving support for their care needs – and importantly, the drivers of this – is mixed and incomplete.

In the current system, there is a lack of public understanding about how social care services are provided, and by whom. Ipsos MORI found that the majority of people think the NHS provides social care services and just under half (47%) wrongly think social care is free at the point of need.

There are also many barriers to people making well-informed choices in this sector. Having conversations about ageing in advance can be difficult for people and it can be hard for people to know who to trust for advice. Available services and capacity to accommodate people varies locally. There is also often very little prior consideration of care needs and options, meaning decisions about care are often made at a time of crisis.

The majority of local authority-funded users reported they are satisfied with their care. The Adult Social Care Survey indicates that 61.2% of local authority-funded adult social care users reported that they were ‘very’ or ‘extremely satisfied’ with their care and support, while 2.5% reported that they were ‘very’ or ‘extremely dissatisfied’, in 2019 to 2020.

In terms of the quality of the services, Care Quality Commission data from October 2021 shows that 85% of providers were rated ‘good’ or ‘outstanding’, while 14% were rated ‘requires improvement’ and 1% were rated ‘inadequate’. It should be noted, however, that there is significant variation in quality across local authorities.