The Financial Times has recently run an interesting piece on the rising cost of social care across the country and its impact on funding. In particular, focussing on Hampshire County Council, which, like many local authorities in England, is grappling with severe financial challenges driven by rising child and adult social care costs. These statutory services now consume 83% of the council’s budget, up from 53% in 2010-11. Despite being one of the wealthier counties, Hampshire faces a £175 million budget deficit by 2025-26. Local government funding from Westminster has declined 46% since 2011, while service demand continues to rise. The council is cutting non-essential services like highway maintenance and libraries to cope. Still, even these cuts may not be enough. Emergency financial assistance (capitalisation directions) has become increasingly common, with 18 councils receiving help this year alone.

Hampshire’s situation reflects a broader crisis facing councils nationwide, with eight local authorities going bankrupt since 2018. The Local Government Association has called for a comprehensive review of council funding, while the think tank Demos has proposed a more radical solution: removing local authority responsibility for adult and child social care and placing it under regional trusts managed by central government.

The government has pledged longer-term funding arrangements for councils. Still, many local officials warn that this will not address the £6.5 billion funding gap predicted by 2027. Without more significant reform, more councils could face financial collapse, forcing further cuts to essential public services.

Local government finance reform has been delayed for years, with repeated postponements of decisions on social care funding and council tax. The current system leaves councils dependent on central government grants that are often insufficient and mismatched to local needs. Without substantial changes, councils may struggle with insolvency as social care demands rise.

Lincolnshire Perspective

Lincolnshire County Council spends £395 million on adult care and £167 million on children’s services. These services are essential, but they face serious challenges. The county’s rural nature makes service delivery costly, and the demands on both sectors are rising. While the new government’s NHS reforms aim to improve healthcare efficiency, they miss a crucial point: health and social care are deeply intertwined. Reforming one without the other will leave counties like Lincolnshire in serious trouble.

The Pressure on Adult Care in Lincolnshire

Lincolnshire’s population is ageing. By 2041, over 30% of the population will be over 65, creating a huge demand for adult care services. Lincolnshire spends £395 million annually on adult care and community wellbeing, but costs are rising. Inflation and workforce shortages add to the strain. The cost of delivering care across such a large rural county is also higher than in urban areas.

Adult care services have managed to balance the budget for over a decade, but this has only been possible through one-off government grants and careful financial management. There needs to be more than these temporary fixes going forward. As the demand for care grows, services will start to buckle without a sustainable funding model.

The Rising Cost of Children’s Services

Lincolnshire’s children’s services are highly regarded and rated ‘outstanding’ by Ofsted. However, the demand for services is growing, especially in areas like special education and care for vulnerable children. The council spends £167 million a year on children’s services, but this figure will likely rise as more children need support.

The council is building new schools and children’s homes to cope with this demand, but these projects come with significant costs. Like adult care, children’s services face the challenge of delivering quality support with limited and declining funding.

Health and Social Care: A Joined-Up Problem

While NHS reforms are a step in the right direction, they don’t address the whole issue. Nationally, around 13,000 hospital beds are occupied by patients ready to be discharged but can’t leave due to a lack of social care support. This puts extra strain on the NHS and creates bottlenecks in the system.

Lincolnshire has invested in reablement services to prevent unnecessary hospital admissions and speed up discharges. These services help people recover at home, reducing the burden on hospitals. But they rely on adequate social care funding. If social care budgets shrink, hospitals will be forced to keep patients longer, increasing costs and worsening patient outcomes.

A Broken Funding Model

One of Lincolnshire’s biggest challenges is the outdated and inadequate funding model for rural councils. Delivering services across such a large area is expensive. Yet, Lincolnshire has seen a 90% cut in its central government grant since 2011. At the same time, the county has one of the lowest council tax rates in the UK. This limits local revenue and makes it harder to cover rising costs.

The council has done well in managing its finances, but these pressures are unsustainable. The current funding model doesn’t work for rural counties like Lincolnshire, where costs are higher and demand rises faster than in urban areas.

Why NHS Reforms Aren’t Enough

The government’s proposed NHS reforms focus on improving efficiency within the health service. Still, unless the government looks at the totality of health and social care, these reforms will fall short. The NHS is struggling because social care is underfunded. Hospitals will continue to be overstretched without the ability to discharge patients into well-supported social care.

This is particularly concerning for counties like Lincolnshire. With a growing elderly population, demand for NHS and social care services will only increase. Without an integrated approach to health and social care, hospitals and care services will struggle to cope.

The Way Forward for Lincolnshire

Lincolnshire’s experience shows that focusing on NHS reform will not fix the problem. The county needs an adequately funded, integrated health and social care system. This means reforming how rural areas like Lincolnshire are supported, ensuring that the NHS and social care have the resources needed to meet rising demand.

Without this, the government’s reforms may provide short-term relief for the NHS, but the long-term challenges will remain. A fairer funding system for rural councils and a joined-up approach to health and social care is essential if Lincolnshire is to continue delivering the services its residents rely on.