What is the impact of fiscal devolution on adult social care in England? Evidence from a quasi-natural experiment

<p dir="ltr">This study investigates the impact of enhancing fiscal devolution on public services using the publicly-funded Adult Social Care (ASC) in England as an interesting case study. In 2017/18, the central government piloted the 100% Business Rates Retention Scheme, allowing selected local authorities to retain all revenue from the business rates tax levied on business properties, compared to the previous 50% retention scheme. We exploit this quasi-experimental setting to assess whether greater fiscal autonomy led to improved funding and outcomes in a high-priority public sector: ASC. We apply a synthetic difference-in-differences approach to estimate the average treatment effect on the treated for the first cohort of pilot local authorities. The analysis spans 2013/14 to 2019/20 and accounts for staggered adoption and non-random selection into the policy. We analyse the impact of the policy on local income and ASC expenditure per capita, as well as outcomes including user care-related quality of life, carer-reported quality of life, mortality, personal well-being, and carer allowance receipt. Results indicate that pilot local authorities experienced a net increase in income, which was partly allocated to higher ASC expenditure per capita. We also find improvements in user care-related quality of life and carer-reported quality of life, reduced mortality, and better well-being through lower anxiety levels. In addition, there was a decline in the proportion of individuals receiving carer allowance. These findings suggest that fiscal devolution can enhance funding and outcomes in high-priority public services such as ASC.</p>