Chancellor announces extra £7.5bn to be spent on adult social care after hearing “very real concerns” from councils

November 17, 2022

The Chancellor of the Exchequer, Jeremy Hunt, has said in his Autumn Statement today (17 November) that the Government will spend an extra £7.5bn on adult social care services over the next two years and will pursue a programme that will cover over half of England with devolution deals.

Hunt claimed that his plans for the economy would see funding for public services continue to rise over the next five years but said Government departments “will have to make efficiencies to deal with inflationary pressures in the next two years”.

On the additional funding for adult social care, the Chancellor said he had heard “extensive representations” about the challenges faced by the sector.

He noted that the increasing number of people over 80 was putting massive pressure on care services and added that he had heard “very real concerns” from local authorities, particularly around their ability to immediately implement the Dilnot reforms – which called for a cap on the amount people pay for care, amongst other recommendations.

“So I will delay the implementation of this important reform for two years, allocating the funding to allow local authorities to provide more care packages”, Hunt said.

“I also want the social care system to help free up some of the 13,500 hospital beds that are occupied by those that should be at home,” he added.

The Government will allocate a further funding of £1bn next year and £1.7bn the year after to address this particular issue.

“Combined with savings from the delayed Dilnot reforms and more council tax flexibilities, this means an increase in funding for the social care sector of up to £2.8bn in 2023 and £4.7bn in 2024”, Hunt said.

This funding increase for adult social care – which Hunt hailed as the “biggest increase in funding under any government of any colour in history” – will lead to an estimated 200,000 more care packages being delivered over the next two years.

In other announcements, Hunt confirmed that £1.7bn from the Levelling Up Fund would be allocated before the end of the year.

The Government will also press ahead with major infrastructure projects including High-Speed Rail 2 to Manchester, the Northern Powerhouse Rail core network and East West Rail.

The controversial Sizewell C nuclear plant – a project which the Government faced a judicial review over in September – is also going ahead.

In addition, the Chancellor reaffirmed the Government’s commitment to devolution, stating that he wished to make it easier for local leaders to make things happen “without banging on a Whitehall door”.

He said that soon over half of England would be covered by devolution deals following “trailblazer” deals in Manchester and the West Midlands.

A new Mayor is to be elected in Suffolk as part of a deal agreed with Suffolk County Council, while the Government is in advanced discussions on mayoral devolution deals with local authorities in Cornwall, Norfolk and an area in the North East of England. These deals are expected to happen "shortly".

On housing, Hunt revealed plans to cap the increase in social rents at 7% in 2023/24 and 2024/25.

The Chancellor said that the Government would meanwhile “change its approach” to ‘Investment Zones’, which had been set for significant expansion under his predecessor, Kwasi Kwarteng.

The Treasury document that accompanied Hunt’s speech says: “The government will use [the Investment Zones] programme to catalyse a limited number of the highest potential knowledge-intensive growth clusters, including through leveraging local research strengths.”

Hunt also announced a £14bn business rates tax cut over next five years. “Nearly two thirds of properties will not pay a penny more next year and thousands of pubs, restaurants and small high street shops will benefit”, he said.

On overall public spending, Hunt said: “For the remaining two years of the spending review, we will protect the increases in the departmental budgets we already set out in cash terms and then grow resource spending at 1% a year in real terms in the three years that follow.

“Although departments will have to make efficiencies to deal with inflationary pressures in the next two years, this decision means overall spending in public services will continue to rise in real terms for the next five years”, he added.

Adam Carey