The Supporting People Programme - Communities and Local Government Committee Contents


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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