Survey finds 81% of councils on course to overspend adult social care budgets

Eight in 10 councils in England are on course to bust their budget on adult social care by March, according to a survey said to show the “ongoing and intensifying pressures” facing the sector.

Such conditions do not provide the environment in which the new Government’s proposed National Care Service “can hope to succeed”, the Association of Directors of Adult Social Services (Adass) warned.

The bleak picture of financial pressures facing local authorities does not take account of further strain expected from the recently-announced hike in employer national insurance contributions – which is due to take effect from April, the organisation noted.

Voices within the sector warned, following Chancellor Rachel Reeves’s Budget last week, that some care homes could be forced to close.

Care England, which represents providers in adult social care, said the national insurance rise, combined with wage rises, will leave the sector with “an additional circa £2.4 billion funding hole to plug”.

Adass president Melanie Williams said the financial situation for councils is “at breaking point” and that the rises mean the adult social care sector “is at the limit”.

She said: “Councils have a legal duty to provide care for our disabled and older people, but the only way we can do this will be by going further and further into debt.”

The latest Adass Autumn survey of directors of adult social services saw 131 of the 153 English councils with social care responsibilities respond pre-Budget, between September 12 and October 9.

Adass said 81% of councils which responded reported being on course to overspend their adult social care budget in the current financial year, up from 72% in 2023/24.

Overspend has continued to rise in recent years, up from 63% in 2022/23.

Adass’s latest report stated: “Unless resolved, the trend indicates that within a couple of years, all council adult social care budgets will be overspent.”

The survey also found that more councils are being required to make in-year savings, with more than a third (35%) of councils being asked to do so, up from just under a fifth (19%) in 2022.

Adass said planned savings for the 2025/26 financial year are estimated to have risen to £1.4 billion from just over £900 million.

The report warned: “In this context, it will be even harder for councils to make the investment needed in workforce, prevention and unpaid carers, all of which are crucial to improving health and social care in the longer-term.”

Ms Williams said while she welcomed Government commitments to multi-year funding settlements for councils, and a fair pay agreement for care workers, “what is clear is that in the short-term things are going to get worse before they get better”.

She said: “In our Spring Survey we described the financial situation in adult social care to be ‘as bad as it has been in recent history’.

“This report highlights the ongoing and intensifying pressures facing adult social care, which are also directly impacted by the broader challenges facing local government and the NHS.”

She said the findings of the latest survey are “not the conditions for adult social care to thrive” and “not the conditions under which the new Government’s proposed National Care Service can hope to succeed”.

In the Budget, the Government announced £600 million for councils – expected to be split between both adult and children’s social care – but Ms Williams added her voice to that of other providers, saying “in reality, the new money announced will end up getting used to cover employers’ national insurance increases and wage increases amongst providers”.

With the Adass survey estimating councils’ total projected overspend in the year to March 2025 to be £564 million, the Nuffield Trust said the £600 million funding “likely won’t even touch the sides”.

The health think tank’s deputy director of policy, Natasha Curry, said: “Government ears cannot stay deaf to the repeated warning bells on social care, which are clamouring after fallout from the Budget and today’s Adass survey.

“Not only does Adass lay out the sector’s vulnerability, the report shows how the sector is fundamental to realising the Government’s major shifts in health and care – but to do that it must be supported via meaningful, long-term financial support, instead of sporadic short-term handouts that simply do not go far enough.”

The Local Government Association (LGA), representing councils, echoed concerns around the £600 million, saying the wage and national insurance rises are “likely to absorb much of the grant”, meaning “many councils will have little left to address urgent care challenges, such as long assessment waits or delayed care packages”.

David Fothergill, chairman of the LGA’s community wellbeing board said: “As this vital report highlights, a range of serious concerns that councils have been raising for years remain and a vast majority of councils are now struggling to balance the books.

“Immediate investment is needed in order to address unmet and under-met need and ensure timely access to social care for all who need it.”

The Government has been contacted for comment.