Chart: New funding for social care outweighed by future funding pressures

• Announcements in the Budget mean that funding for adult social care in England will now grow by 2.3% a year on average between 2015/16 and 2019/20.
• This follows years of reductions in spending – with a 1.1% a year average cut in spending between 2009/10 and 2015/16.
• This is still less than half the amount needed to keep providing the same service as in 2015/16, as demand pressures on the system are 5.6% on average a year including the National Living Wage (NLW). These pressures are 4.5% a year on average not including the NLW.

The additional money in the Budget means that social care will grow rather than shrink between now and the end of the decade (assuming all the new money goes to social care, which is not guaranteed).

This growth will be 2.3% on average a year in real terms, which is double the rate of the NHS.

But even with this new money, we’ll barely be spending more in 2019/20 than we were a decade previous.

Based on LSE’s model, the pressures on social care are likely to increase by at least 4.5% a year up to 2019/20. In addition there is the impact of the ‘National Living Wage’, as social care is a sector that is reliant on low-paid workers. When the impact of this is added in (on top of expected increases to the pay bill), the pressures rise to 5.6%.

So, if you wanted to provide the same service as there is now you would need to increase funding by at least 4.5% a year on average. This will just keep up with the future pressures on the system. This is still below the trend of 6.1% a year since 1994/5.