The future of adult social care: Why smarter forecasting is no longer optional

Adult social care in the UK is at a tipping point. With local authorities facing escalating costs, changing demographics, and tightening budgets, the challenge is no longer just about balancing the books – it’s about redefining how we plan for the future.

According to the County Councils Network, councils are grappling with a projected £54 billion funding gap over the next five years, which could see them stripped back to little more than care providers. Meanwhile, the Local Government Association (LGA) warns that one in four councils may require emergency financial support within the next two years. These figures highlight a stark reality: without accurate forecasting, councils will struggle to make sustainable long-term decisions.

Yet, many local authorities are still relying on outdated financial models that fail to reflect the real-time shifts in care needs. The answer isn’t just about managing spend – it’s about understanding the evolving landscape of care needs at an individual level and leveraging data to build resilience.

Why the old models no longer work

Historically, councils have forecasted adult social care spending using broad demographic trends and static financial assumptions. While these methods provide a baseline, they fail to capture the dynamic nature of care needs:

• Growing number of working age adults with intensive/complex long-term support needs

• A growing shift towards strengths-based, preventative care

• Rising demand for high-cost, 24-hour supported living placements

• Significant variations in need across different localities

Without accurate, forward-looking data, councils risk misallocating resources, overestimating future needs, or failing to prepare for shifting demand.

Data-driven forecasting: A new approach to sustainability

A forward-thinking approach to forecasting means using granular, real-world data to predict spending trends more accurately. Some councils are now taking a more person-centred approach, tracking how individual care needs evolve over time and using this information to refine their financial planning.

By focusing on actual changes in population needs, councils can:

• Reduce forecasting errors and improve budget accuracy
• Identify trends early, ensuring more strategic resource allocation
• Compare funding levels across regions to spot potential inefficiencies
• Proactively plan for market shaping and future care provision

Recent analysis by Imosphere shows that local authority partners who implemented a strengths-based funding approach experienced a 5% reduction in the number of people requiring long-term Personal Budgets. However, rather than seeing overall spend decrease, they noticed an increasing complexity in cases. This trend underscores a critical insight; budget reductions don’t necessarily equate to cost savings if the proportion of high-needs cases rises. The ability to see and predict these shifts in real time is key to maintaining financial sustainability.

Embedding smarter forecasting into financial strategy

As councils navigate an increasingly complex financial environment, technology and data-driven insights are playing a greater role in enabling sustainable budget planning. Predictive modelling tools are helping authorities understand where care needs are shifting, allowing them to take a proactive, rather than reactive, approach to financial management.

One such tool, Formulate, has demonstrated how real-time, person-level data can help accurately predict budgets within 4% of actual spend - aiding prediction of future spend. By embedding smarter forecasting methodologies into budget planning, councils can:

• Improve financial stability – by anticipating future pressures rather than reacting to budget shortfalls.

• Shape markets effectively – ensuring the right mix of care settings for emerging needs.

• Reduce inefficiencies – by using transparent, data-driven methodologies rather than manual estimations.

Beyond budgeting: Forecasting as a strategic tool

The financial pressures facing councils are not easing, but those who can predict and adapt will be best positioned to navigate the challenges ahead. Smarter forecasting isn’t just about balancing numbers; it’s about future-proofing services, protecting vulnerable populations, and making informed policy decisions.

How does your council currently track changes in care needs over time? Are you confident that your financial forecasting reflects the reality of service demand? What steps are you taking to ensure budgets remain sustainable over the next five years?

The future of adult social care isn’t about reacting to budget crises, it’s about staying ahead of them. Councils that embrace predictive, data-driven financial planning will be the ones that not only survive but thrive in the evolving landscape of care provision.