|Practice area:||Health and social care | Social care|
|Client:||Big Society Capital|
|Published:||30 October, 2014|
|Keywords:||qualitative analysis quantitative analysis stakeholder surveys and consultations|
The UK is facing a funding crisis in social care for older people.
Demographic changes mean that between 2010 and 2022 the population of people aged 65 and over is expected to grow by 27% and the number of people aged 85 and over is projected to grow by 44%. Research suggests that, just to keep pace with demand, local authority spending on social care for older people may have to rise from £7.4 billion to £9.8 billion between 2012 and 2022.
In addition to these demographic changes, there are other factors that are also contributing to the funding crisis. For example, despite the growing demand for social care, annual spending on adult social care in England fell by £670 million between 2010-11 and 2012-13.
The projected social care funding gap is a significant one and so can only be met from a range of different sources, with public expenditure needing to play a very important role. Social investment provides an additional potential avenue for financing solutions.
The social investment market is growing and almost 90% of social investors expect to increase their investment in social ventures The latest estimates show that social care accounted for 11% of the social investment market by value.
Estimating potential aggregate impacts of social investment in the care sector is difficult and uncertain since many social investments are in the early stages of being developed so limited evidence of their effectiveness is available. However, what is clear from this research is the diversity of the ways in which social investment could be used to meet the challenges in social care. In our report we provide an illustrative example which shows the additional social investment that might be needed in order to eliminate up to a quarter of the local authority funding shortfall that is projected to emerge unless other investment comes in.
Social investment cannot replace the role of public spending. Charities and social enterprises must be able to repay any finance from social investment. However, it has a very real potential to make an important contribution to meeting the social care needs of older people over the next few years, particularly as a tool to finance early intervention and innovation. As 900,000 older people with a care need are currently going without any support at all in this country, it is potential that we cannot afford to ignore.