7 SUPPORTING PEOPLE DISTRIBUTION
FORMULA
179. The 2004 Robson Rhodes review of the Supporting
People programme[220]
found that the distribution of funding between similar authorities
was uneven, and recommended the creation of a formula that allocated
resources based on need rather than 'legacy' services. This led
to the creation of, and consultation on, the Supporting People
Distribution Formula (SPDF).
180. The SPDF takes the total Supporting People funding
'pot' for England and then assesses relative need between authorities—mainly
on the basis of numbers of vulnerable people at risk, with allowances
for levels of deprivation and cost differences—and then
calculates target allocations for each authority based on the
level of need for housing-related support, by using various needs
data. How quickly the SPDF is used to distribute funding so authorities
reach their target allocations is based on two principles:
- Authorities furthest away from their target allocations
should receive the largest annual increases and face the largest
annual reductions respectively.
- There should be no 'cliff edges'. That is, the
pace of change must not be too fast, particularly for those facing
large reductions in allocation. [221]
181. As the Minister explained to us in oral evidence,
"[…] if you just assessed it on need and you went from
that overnight to a needs-based allocation it would result in
services being closed immediately and vulnerable people losing
support they would otherwise get. You have to find a way of achieving
a more gradual change."[222]
The settlement letter from HM Treasury following the 2007 Comprehensive
Spending Review agreed indicative allocations for 2008-09 - 2010-11
based on a limited implementation of the SPDF, but emphasised
the requirement to accelerate the process to reflect need.
182. Stoke-on-Trent is an example of a local authority
which is currently receiving below-target funding through the
SPDF. Whilst the SPDF estimates that Stoke needs £13.5m to
fund its Supporting People services, Stoke's budget for 2009-10
is £6.2m. Despite annual increases of at least 7% between
2007/8 and 2011/12, it will still take a considerable time for
the authority to realise its target funding level. Stoke's evidence
claims that vulnerable people have been disadvantaged as a result
of this settlement, and says that the authority would like to
see an acceleration in the pace of change of the SPDF to bring
under-funded authorities up to target within shorter timescales:
[…] the issue of the distribution formula
is the pace of change, and the movement towards an allocation
that is based on need, which for us cannot come quickly enough
really.[223]
Evidence from Stockton-on-Tees supports this view,
stating that in the 14-year period it will take for the authority
to reach its target funding, Stockton will have lost out on approximately
£40m in grant.[224]
183. Written evidence from the Association of Directors
of Adult Social Services and the LGA suggests that the plight
of currently underfunded local authorities may be forgotten with
the shift to paying Supporting People funds through the Area Based
Grant:
A number of authorities have raised concerns
about changes to the allocation formula for Supporting People
funding during the course of the current spending review and will
wish to further press their concerns—in order to ensure
that they are not permanently disadvantaged—in the next
spending review period. The Area Based Grant guidance 2008 published
details of amounts of Area Based Grant that relate to former specific
grants for a transitional period up to the end of the current
spending review. In order to ensure that authorities can identify
and press concerns relating to the current level of funding it
will be helpful for this transparency to continue for a further
transitional period.[225]
It was also felt that the transparency afforded by
the Distribution Formula could act as a protection to Supporting
People funds in the short term following the lifting of the ringfence,
as we have already recommended.
184. In oral evidence to the Committee, there were
some minor challenges to the data sources being taken into account
in the calculation of the Distribution Formula. Peter Rush of
Hampshire County Council felt that the SPDF did not take into
account issues of rurality—that is that although Hampshire
has a smaller population of individuals requiring services, that
population is more dispersed in a large rural county and the SPDF
does not account for the additional costs of delivering services
in this way. [226]Stephen
Cheetham of Cambridgeshire County Council also felt that population
growth had not been adequately addressed for those local authority
areas experiencing the greatest population increases. [227]
185. In September 2008, CLG commissioned its Housing
Analysis and Surveys Expert Panel to carry out a technical desk
study on the SPDF. The aim of this exercise was to review the
existing data sources and levels of deprivation applied in the
formula, and make recommendations to address any issues found
therein. A final report is due to be published later in 2009.
186. We accept the argument that without extra
government funding for the transition, gradual movement from historical
funding patterns towards fully needs-based allocations is inevitable.
If a sudden redistribution of funds was made, some areas would
be faced with the prospect of having to make sudden cuts to services.
Nonetheless we appreciate that without adequate funding, councils
will be unable to provide the services vulnerable people need.
We therefore consider that there should be accelerated movement
towards the needs-based allocations, and we recommend that this
take place.
187. Meanwhile, we welcome the commissioning of
a study of the Supporting People Distribution Formula itself,
and the intention to address any issues found therein. We recommend
that the study include consideration of the issues of rurality
and of population growth which have been raised with us during
this inquiry, and that steps be taken to address those issues
should the concerns raised prove valid.
220 RSM Robson Rhodes (for Office of the Deputy Prime
Minister), Review of the Supporting People Programme: Independent
Report (January 2004). Back
221
Ev 231 Back
222
Q 316 Back
223
Q 208 Back
224
Ev 125 Back
225
Ev 216 Back
226
Q 173 Back
227
Qq 253-54 Back
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