• Hari Pillai, Director |
  • Cat Parker, Senior Manager |
10 min read

Adult social care and children’s services are facing mounting pressures. Despite being the highest spend areas for most local authorities, with both the demand and the complexity of need increasing steadily, reforms to funding of social care have been delayed. Recent reports (including the National Audit Office publication) continue to highlight systems that are challenged by chronic workforce shortages, long waiting lists for care and fragile provider and local authority finances.

Our clients tell us they are struggling to keep up with an increase in demand for both children’s and adult care since COVID, are struggling to recruit and retain staff, and a fragile and capacity constrained provider market can mean that choices for the right level of care are often limited and expensive.

In our latest Time to Talk session, we discussed some of these challenges and offered suggestions on how local authorities can balance their actions to manage the immediate pressures while planning well for the longer term future.

Some of the ways in which local authorities can meet the immediate challenges are:

  • Defining strong market position statements:  ensuring an accurate and up-to-date description of their current care needs and demographic profile, and setting out a clear strategy for commissioning and engagement with providers is key to establishing expectations with local care providers
  • Building good relationships with providers: strong relationships with providers will drive a productive compromise in determining fair cost of care, but will also help to drive innovation
  • Investing in prevention: while difficult in times of budgetary pressures, investing in preventative measures such as public health initiatives can pay dividends in decreasing the demand for social care

In the longer term, councils, health and other partners will need to start working together in a more joined-up way to take advantage of stronger buying power and positioning in the care market. Crucially, devising new models of care will be key to meeting long-term increased demand, notably through use of technology.

What are the key concerns in the social care and children’s services market impacting local authorities?

Social care aims to provide a high-quality life for those who receive it, with choice, control and support over services received, and care which is fair and accessible and safeguards them from harm. To enable these outcomes, the social care market has to provide a variety of different models of care at prices which can be met, sustainably, by local authorities.

This is proving increasingly difficult. With widespread inflation, care providers are facing higher utility, food, travel and staff costs. The recruitment and retention crisis means providers find it difficult to recruit the right levels of staff, which can have a detrimental impact on capacity and quality of care. The lack of capacity in the market puts the remaining care providers in a strong bargaining position when it comes to setting care rates, as local authorities seek to meet their increasing demand for care with locally available services.

Most of these challenges are replicated in the children’s services market. National focus on this market has highlighted; firstly, local authorities struggle to access placements which meet the needs of children in their care – there is a significant shortage of supply. Secondly, the prices set for most placements, especially for children with high needs, can be extremely high. Similarly to adult social care, the need for children’s services has increased significantly during COVID and continues to increase, services that were already under pressure, such as CAMHS (Children and Adolescent Mental Health Services) are struggling to ‘recover’. While there have been attempts at market reform in children’s services, this has not provided widespread change.

A key internal concern for local authorities in adult social care and children’s services is also the lack of commissioning capacity. Many councils are struggling to recruit and retain skilled commissioners, attention has turned to upskilling and training the future workforce in this area. Capacity to change is one of the biggest lessons we have learned as advisors to many public sector transformations. The need to protect and build capacity of staff (front line, support services, and managers and leaders) to work on change programmes is a challenge when services are under pressure – without devoting significant resources to this, any change initiatives may struggle to succeed or ‘stick’.

How can councils start addressing these challenges?

New models of care, especially using technology

Widespread advances in technology and use of data have changed most services that citizens receive, however in some areas in local government, and in particular social care there has been slower adoption of cutting edge technology. While we are starting to see technology being used in providing social care (such as telecare in the past), typically this has been reactive rather than proactive or predictive. It is widely accepted that technology should not remove the human element of caring, and the perception that it seeks to do so stops some practitioners engaging with the potential for change. This may be true for a lot of care, but there is an opportunity to use technology to reduce some of the pressures on care staff and release them to more value add interaction-based tasks where the human element cannot be replaced.

Technology can be used in several ways to relieve pressures on the social care market. It can be used to help people live independently in the community, and it can range from relatively simple devices such as automatic pill dispensers and care alarms right up to virtual personal assistants and AI. We still see care packages that are predominantly based on input (ie hours delivered by carers) rather than outcomes. Utilising technology in service delivery can be a lever to reduce costs without diminishing quality.

Technology can also be used to streamline and improve the referral/assessment process; for example by ensuring residents understand what support the council can provide, as well as sign-posting people towards wider community or health services. This can save significant staff time, and support the  transformation of a Council’s front door. The potential to provide a seamless triage and assessment process could support councils to triage and accelerate community care assessments when they are required, whilst freeing up practitioner capacity to focus on managing their case loads.

To use technology well in social care and children’s services, it is essential that commissioners and procurement teams start with the service and individual person outcomes, and use this as the basis to source the right technology to meet the right needs. Rather than thinking about the technology first, and the outcomes that vulnerable people want to achieve as an after thought.

Focus on data sharing and quality

Traditionally, social care and children’s services have been protective of their service users’ data. This is understandable; they hold significant and sensitive information. But having an extensive and accurate data picture of need can be a very powerful tool in seeking to resolving some of the pressures within both service areas, through supporting proactive and timely interventions to prevent crises or escalating needs.

The development of Integrated Care Systems offers an opportunity for both health and social care data to shared and reconciled to understand more about the needs of the local population, developing a place based strategy for commissioning services based on a robust evidence-led basis . However to make this a reality there needs to be a willingness to share data, and in addition the right infrastructure and analytical capability to enable meaningful interpretations of the data. There has been momentum on this during the COVID pandemic; some councils and the NHS trusts in the area started sharing data on occupancy rates to help inform joint responses to supporting vulnerable people in the community during the pandemic. This momentum needs to be built on, there is tremendous potential in developing an evidence based, place based whole system view of the needs of a local population.

However, when taking the above into consideration, and whilst there are examples of good practice. Some local authorities have not yet fully explored the potential to use data more effectively. The lack of interoperability between case management systems used by adult social care and children’s services, and CRM systems used by the wider council can mean that turning this vision into reality is often badged as being ‘too hard to do’. There are steps that can support this agenda, such as developing a common data platform or data aggregation tool, as well as where possible, consolidating the number of CRM systems that a council operates.

The benefits of providing a single view of customer can reap substantial benefits through targeting scarce resources where there will have the most impact. We have a proprietary methodology to help councils achieve this – Connected Council, and as part of this we have developed a shared data platform for Bournemouth, Christchurch and Poole Council which they are taking forward to support them in realising their ambition to be the leading digital and citizen-focused local authority in the UK.

Work on a system, not organisation, level

Integrated Care Systems represent a long overdue acknowledgement that the demand for care and health services are connected, the role of the partnership is key.  While there are good intentions to share expertise and resources, the funding pressures across both health and local government can be a barrier.

It’s also unclear what the right footprint is for place-based working. Given the size of some ICBs it can sometimes be difficult to helpfully resolve issues that are challenging within the boundary of a local authority. The requirement to provide integrated care strategies has been helpful in defining this. ICBs have approached this in different ways; some have decided to focus on one large issue, sat down as a group, and worked on a strategy to resolve it with joint funding. Others are starting at a whole population level. There isn’t one right way – practising genuine partnership working and investing time is critical to success. Integration works when it gives local systems leaders the space and time to collaborate and strip back to outcomes.

It is important to remind partners that the responsibility for supporting vulnerable people in the community to achieve the outcomes they aspire to is shared between health and local government, and often connected. This is evident when exploring the wider determinants of health, which impact people’s mental and physical health. Education, employment and housing are often largely influenced by local government, and but the impact of nonattainment can be felt across the whole system.

Commission differently

It is also possible to work with the provider market to reimagine how care should be delivered in the community. For example, commissioning led by outcomes rather than input (e.g. hours); requiring providers to have more of rehabilitation focus, rather than just focussing on maintenance and longer term care packages. This kind of commissioning aligns well with the agenda in health for new models of care such as virtual wards and developing a technology-based service offer. Commissioning more community-based services and investing in preventative offers should be a key part of future integrated care strategies.

Address recruitment and retention challenges

Recruitment and retention has been challenging in the past few years across all types of workers in adult care and children’s services. Several local authorities have looked at innovative ways to address this crisis. Many councils are being more flexible with utilising overseas recruitment in both children’s services and adult social care. For example, some councils are working with declined industries in a region and looking at utilising their previous workforce and their transferable skills in the care sector. Others are focusing on working with school leavers and utilising apprenticeships as an entry point into a care career.


In order to provide people in receipt of social care with an opportunity to live the life we would all want to live – local authorities will need to work effectively with partners across the sector to resolve the pressures that impact it. Utilising technology and data will form a critical part of this response and will be required to support a vibrant community that is connected, with people and partners working together to find solutions that work for all.

To hear more about how KPMG can help you in addressing challenges in social care and children’s services, please contact one of our subject matter experts.