Guidance

Market Sustainability and Improvement Fund - Workforce Fund: policy statement

Updated 31 August 2023

Applies to England

Introduction

The government is providing a further £570 million of ringfenced funding across financial years 2023 to 2024 and 2024 to 2025 to local authorities to improve and increase adult social care provision, with a particular focus on workforce pay. We expect this additional funding to support more workforce and capacity within the adult social care sector. This will help to ensure that appropriate short-term and intermediate care is available to reduce avoidable admissions and support discharge of patients from hospital when they are medically fit to leave.

The Market Sustainability and Improvement Fund (MSIF) Workforce Fund is worth £365 million in 2023 to 2024 and £205 million in 2024 to 2025, and closely mirrors the original MSIF grant worth £1.4 billion over these 2 years. Funding from this additional grant will be paid as a single payment in 2023 to 2024.

This explanatory note provides further detail on the MSIF Workforce Fund, including our requirements for how the funding should be spent, our wider spend expectations for adult social care (ASC) funding as outlined previously, the associated outline conditions of the funding and the required reporting mechanisms for local authorities.

A final grant determination has been published alongside this policy statement.

Purpose of the fund

The government expects that this new £570 million investment will enable local authorities to make tangible improvements to adult social care capacity.

The government recognises that local areas are best placed to design and deliver care initiatives tailored to meet local needs effectively. In recognition of this, the £570 million of additional funding is designed to have the same flexibility as the MSIF to meet local pressures, and so local authorities can choose to use the funding to:

• increase fee rates paid to adult social care providers, particularly as we continue to prepare for the implementation of charging reform
• increase adult social care workforce capacity and retention
• reduce adult social care waiting times

The recruitment and retention of sufficient social care staff with the appropriate skills, knowledge and behaviours is critical to improving adult social care capacity. If people who work in adult social care are supported, recognised and have opportunities to develop and progress, they are more likely to stay working in the sector.

We strongly encourage local authorities to work closely with providers to use this additional funding to grow workforce capacity by investing in improved pay for people who work in care. This could include investing in pay differentials to recognise qualifications, skills and experience; or raising pay.

We expect growth in workforce capacity to support more local authorities to cope with potential winter challenges in the short-term. DHSC will ask local authorities to provide a summary description, aligned to NHS winter surge plans, of how they will ensure sufficient capacity to meet potential adult social care surges in demand over winter, including through use of this fund, by 28 September 2023.

As set out in the Social care resources explanatory note, the 2023 to 2024 Local Government Finance Settlement sets a clear expectation that the additional funding being made available to adult social care this year, as announced at the Autumn Statement in November 2022, goes beyond meeting inflationary pressures and must deliver tangible improvements in adult social care services. As set out, the department is monitoring 2023 to 2024 revenue account (RA) budget data to ensure that ASC funding is delivering a substantial increase in planned adult social care spending. As a ringfenced grant, we expect this new grant to be used as additional funding and lead to a further, commensurate increase in local authority adult social care expenditure.

Grant conditions

The grant conditions governing this supplement are the same as the existing MSIF conditions. We recognise that by the time local authorities receive this funding, they will already have submitted their initial reports and capacity plans to DHSC. As such, local authorities will need to complete an additional section of the final report in May 2024, outlining which target area their allocation of the additional funding has been used for, a description of how it was used, and an assessment of the impact that funding has had on their chosen area.

The remaining grant conditions are:

• that the local authorities must allocate their full funding allocation from the grant on adult social care, as part of a substantial increase in planned adult social care spending. Local authorities must confirm that this has been added to their existing ASC budgets
• local authorities must evidence improvement in at least one of the target areas using DHSC performance metrics. The target areas chosen should support the most pressing needs in the local authority area
• local authorities must provide a final report in May 2024 on spend and progress. This must record all DHSC target area metrics: workforce recruitment and retention, reducing waiting times and increasing fee rates

Full grant condition wording and allocations have been published through the final grant determination.

Local authorities will be able to decide how they choose to focus the funding, in line with local circumstances and priorities. As per the conditions, local authorities must show improvement in one of the target areas. We will also expect local authorities to provide assurance that other target areas have not worsened. To ensure this, local authorities will be required to report on all target areas through detailed metrics.

Through reporting, DHSC will assure itself that the funding is being used in line with the grant conditions and, as a last resort, ultimately reserves the right to withhold future funding until satisfied that all fund conditions have been met. DHSC will provide local authorities with the opportunity to explain how they have used the funding and any additional context through challenge sessions before considering further measures.