Only 1 in 25 directors of adult social services in England are fully confident that they have enough money to meet their statutory duties this year, a survey found.
The risk of thousands of caring organisations going bust has increased significantly in the wake of the COVID-19 pandemic, the Association of Directors of Adult Social Services (ADASS) warned in their latest Budget Survey for 2020.
It calculated that the sector faced more than £6.6 billion in extra costs, such as personal protective equipment (PPE), staffing, and deep cleans, due to coronavirus, by the end of September 2020.
James Bullion, ADASS president, said: "Urgent action is needed to plug the financial black hole that has been blown in local government finances, to properly recognise and reward colleagues working in social care, stabilise providers of care, and most importantly safeguard and ultimately enhance the care and support available to those of us who need it.
"Without such action, local authorities will run out of money, care providers will go to the wall, many of us will not get the care and support we need, and the economy will take a further hit as more of us are forced to give up work to fill the caring gaps."
The survey was based on responses from 146 directors of adult social services in England.
ADASS said the funding pressure from the pandemic, together with planned savings of £608 million to balance council budgets, and the loss of a minimum of £190 million of planned income, meant that just 4% of directors were confident that their budgets were sufficient to pay for basic care this year.
Nearly three-quarters of councils (69%) indicated that over 60% of their planned savings would be at risk in the current financial year.
Since local authorities have a legal obligation to deliver a balanced budget year on year, unlike NHS Trusts, even basic services could come under threat without extra funding.
"This puts at risk the assessment of individual’s needs, safeguarding adults, and provision of care and support services to older and disabled people," ADASS said.
An increase in the National Living Wage, while welcome, placed a significant pressure on local authority social care budgets, the report said, with councils expecting to spend an additional £1.6 billion between April 2018 and March 2021 on meeting these costs.
Without clarity on future funding or reform, it was unclear how even a basic uplift for adult social care staff wages could be funded next year, the survey warned.
The report called for:
A 2-year ring-fenced funding settlement for adult social care to cover the additional costs of COVID-19 and to allow reform to be agreed, planned, and implemented
A new employment deal with care staff, including a workforce strategy, adult social care minimum wage, enhanced training, development, and career progression, recognition and regulation
Reform of the care provider market based on sustainable new business models
A consultation programme over the next two years to build a care and support system for the next 10 to 20 years
Mr Bullion said that "ongoing ambiguity, despite numerous Government White Papers, Green Papers, and consultations over many years, means that we are no clearer about the size, shape, and ambition for adult social care over the course of the current decade."
Simon Bottery, senior fellow at The King's Fund said: "COVID-19 has exposed pre-existing weaknesses in a social care system that has been underfunded and overlooked for too long.
"Councils have the key role to play in ensuring the social care sector emerges from the epidemic in a viable state. They must support care providers who are facing increasing costs, reduced income, and have had to manage higher rates of staff absence. To do that councils will need additional support and investment from central government in the short term, followed by full-scale reform to create a system that properly supports people to live the lives they want."
Anita Charlesworth, director of research at the Health Foundation, said: "Successive governments have taken a make-do-and-mend approach to social care, with short-term stop-gap funding to patch over the fundamental problems. This can't continue.
"Social care needs fundamental reform underpinned by a long-term funding settlement which is enough to provide proper access to high-quality care, and decent terms and conditions for staff. Ultimately, these are political choices. Unless the government chooses to spend more on social care and reform the broken system, people and their families will continue to suffer unnecessarily."