Examination of Witnesses (Question Numbers
800-819)
MS JENNY
OWEN AND
COUNCILLOR SIR
JEREMY BEECHAM
3 DECEMBER 2009
Q800 Charlotte Atkins: Thank you.
You both say in your memos that social care is underfunded. How
much is it underfunded and how do you calculate that?
Councillor Sir Jeremy Beecham:
We can start with Alan Johnson's prediction that by 2020 there
will be a £6 billion gap in funding. That was predicated
on the current level of needs, but as we all know demography and
medical advances are likely to increase that. Another way of looking
at it is that an LSE study forecasts that we need over 3% real
terms growth every year to keep pace with those trends. There
does seem to be a very significant gap, and of course that covers
both the health and adult social care services provision within
local government.
Q801 Charlotte Atkins: What proportion
of local government spending currently goes on social care?
Councillor Sir Jeremy Beecham:
It partly depends on how you define local government spending.
Taking the totality it is about 13% but it is a much higher proportion
of what local authorities have discretion over because within
the total expenditure there are vast amounts of direct grants,
particularly in education. Adult services in social care would
be the largest item in the expenditure of most upper tier authorities
(unitary and county authorities) by a considerable margin.
Q802 Charlotte Atkins: Obviously
you will have heard that the state of public finances are going
to be heading into tough times. What will that mean in terms of
preparations for budgets for social care?
Councillor Sir Jeremy Beecham:
In any event councils are having to, and are succeeding, in generating
efficiency savings. Many councils are re-engineering the way that
services are provided, including adult care services. One of the
necessary features to bear in mind here is that we have to move
to a more "whole systems" approach, so we have to look
at both health expenditure on social care and local authority
adult services expenditure. Local authority adult services expenditure
is only about one-seventh of the NHS total budget. In addition
however, to, as it were, direct provision through adult services,
local authorities also of course support a range of services which
impinge substantially upon the clients in question. Whether that
is housing, leisure, transport or education, there is a range
of services which apply to that group, and of course that group
itself is two-thirds people of pensionable age like me and one-third
of younger people, so it is a very diverse population that we
are looking at.
Q803 Charlotte Atkins: Jenny, would
you like to come in.
Ms Owen: I would obviously agree
with that, but perhaps I could add a couple of points. First,
the Green Paper The Future of Care and Support talks about
a £5 billion funding gap that we are going to be looking
at in the future, and I think it is important to state not what
the funding gap looks like now but thinking about what we are
going to be heading into with the big demographic changes that
are clearly coming into place. £5 billion is a round figure,
a big figure, so look at that. In terms of the local authorities
funding of social care, it is also worth noting how much of that
can come from local council tax. There is a big variation but,
on average, 39% of social care costs are funded by local government
through council tax, and in some places it is up to 80%, so there
is a significant amount of money that comes from local funding,
from local taxation. Your final point was about how we are managing
with the economic downturn and the squeeze on budgets.
Q804 Charlotte Atkins: Yes, the preparations
you are making for the tough times ahead in social care budgets.
Ms Owen: I know from my colleagues
nationally, colleague directors across the county, that we are
all looking at very significant budget gaps between what we are
looking at and what the current costs are, and looking at the
demographic pressures. There are very significant gaps that we
need to be managing and there is a whole range of activities going
on in looking at every bit of efficiency that we can find, looking
at how we can do things differently, integration, taking money
from back-office costs, lots of work which is broadly labelled
"Transformation activity" but which is really trying
to do things in a more cost-effective way, because there are very
significant concerns about that.
Q805 Charlotte Atkins: You were talking
about a big variation across councils for the cost of social care.
What is that down to?
Ms Owen: I was talking about the
very big variation between the costs that are funded through local
council tax. There is a number of reason for the variation in
terms of costs between councils. Clearly there are differences
between regional variations, the costs in the market, the costs
that you have to provide care, the amount of costs for staffing
and wages and so on, and we know there is a very big variation
between how we spend our money.
Councillor Sir Jeremy Beecham:
There is a slightly worrying trend in terms of commissioning,
because there is a temptation in commissioning to look to reduce
the costs of, for example, domiciliary services. I know in my
own authority significant moves have been made there and the outcome
of that is that the outsourced staff are being paid at or just
above minimum wage to quite a significant degree less than they
would have enjoyed with the local authority, and it does raise
questions about workforce planning and whether you can attract
and retain people with the right skills. That is a concern, but
councils are often being driven in that direction.
Charlotte Atkins: Thank you.
Q806 Stephen Hesford: The Green Papers
sets out funding options. Which, if any, do you favour?
Councillor Sir Jeremy Beecham:
The LGA does not have a position on which of the options it favours,
but personally I lean towards the compulsory insurance model.
We have not really taken a view about at. Our prime concern is
that which Jenny and I have both touched on, pointed to by the
Chairman, which is the totality of funding.
Q807 Stephen Hesford: Can I ask why
the LGA does not have a position?
Councillor Sir Jeremy Beecham:
Because our concern is primarily about the totality of the funding.
There will be further debate about how it is to be provided. For
us, the main thing is to ensure that the quantum is right, and
particularly, as I say, that we look at the whole systems approach,
which involves the NHS funding. One of the great gains in the
proposals around free personal care, about which there are of
course still numerous questions to be answered, is that this does
get the NHS firmly into the game of effective partnership with
local councils in a way that perhaps we have not seen since joint
finance projects expired sometime in the 1980s, I think it was.
It has not really happened to a significant extent since then
and it is potentially a very important step forward. After that,
how it is funded of course, in terms of the balance between tax
and contributions, is a wider issue, but from the service perspective,
the crucial thing is to get that effective partnership and NHS
resource into the provision.
Q808 Stephen Hesford: Jenny, which
model?
Ms Owen: ADASS does not want to
rule out entirely the tax-funded option. We thought it was ruled
out too soon and that it needs a bit more looking at.
Q809 Stephen Hesford: Are you lobbying
us to put that back in?
Ms Owen: I think it should be
looked at again and not be dismissed. If, once you have done that,
you dismiss it and it is a range of the other options, the most
important thing for us is that enough money gets in the system,
and the model that we think will get enough money in the system
is the comprehensive insurance model. That is what we are supporting,
for that reason.
Q810 Mr Scott: The Green Paper proposes
either a fully national model or a part local/part national model.
What would your response to that be?
Ms Owen: You are not quite touching
on this, but perhaps I could first of all say that we absolutely
support the notion of a national assessment, the portability of
assessments. That is one part of a national system: that if you
have an assessment it should be consistent nationally and people
should be able to move with it.
Q811 Mr Scott: That is the next question.
We will be coming to that.
Ms Owen: Okay. On the second part,
which is about how the funding should be delivered—Should
it be nationally determined? How much money there should be for
that assessment? Should it be locally determined?—we have
a position here where you can see the advantages and disadvantage
of both systems. We are saying that there are significant advantages
in having a part local system. As I was just saying, in some places
80% of social care is funded through local government tax. There
is a democratic accountability. You can tie it in and work closely
with your partners in the locality; you can work closely with
the NHS, primary care trusts, GPs; you can work very closely with
other services provided by councils that are really important
to people's lives: transport, universal services and all of those
things. It is very hard if you do not have that locally driven.
However, we know that a lot of people find this inconsistency
between what you get in one place and what you get in another,
what you are allocated in terms of the funding, is very difficult.
We would say that if the Government was going to introduce a national
system of funding—so that there would be this amount of
money, an entitlement, and it would be nationally determined—then
the risk about how affordable that is should be held nationally.
We have seen this before, in the past, around residential care
and social security payments. Local government is very good at
getting a finite budget, a determined amount of cash and working
within that budget. We take the risk of demands and the amount
of money not working terribly well—the demands are much
more than the money we have—and we try to make that pot
work. If you have a national funding entitlement, then there is
a risk that the control of that money is nationally held.
Q812 Mr Scott: Would it not be, at
the moment, that there could be accusations, depending on where
you are in the country, that it is a postcode lottery.
Ms Owen: Yes.
Q813 Mr Scott: You will get a great
service on one side of the high street and not such a great service
on the other side because it is a different council. A national
system would in theory stop that, would it not?
Ms Owen: That is exactly what
people say and what they do not like about a locally determined
level of funding, because it will be different. That is absolutely
clear. However, nationally there is a level of funding available,
and the costs escalate. The costs of residential care funding,
because it was held nationally, escalated over ten years tenfold
because there was no cap on it. It is a very interesting question
that the Government are considering doing this again. There is
an issue about that. However, on the other hand, there is another
issue which it is important to consider. It is not jut the funding
that would go into somebody's personal budget or their care allowance,
you also have to provide funding for preventative work, for those
universal services that need to be delivered locally. I think
it is quite a complex system when you start thinking about national.
Q814 Mr Scott: Sir Jeremy, what in
your view would be an ideal balance between local and national
funding?
Councillor Sir Jeremy Beecham:
The concept is best described by looking at a national care guarantee
rather than talking about a national care service, so that you
have that basic entitlement wherever you are. How it is delivered
will depend on local circumstances and local choice, of course
reinforced by local accountability. After all, we have had the
National Health Service for 60 years and, arguably, we have not
eliminated the postcode lottery there. Sometimes I have been tempted
to form a society for the preservation of the postcode lottery
because I do think you have to respect local differences, not
only in demand but how you meet that demand, and so you need a
system which is flexible enough to allow you to engage with other
partners, the third sector perhaps, in particular, to commission
appropriately and to offer choice. You cannot do that in a monolithic
bureaucratic structure, so you do need to have the framework of
a national care guarantee and then that is delivered locally.
As to the balance of funding, there is an issue here too, because
if the funding were to go national, that would have a significant
effect on the gearing that would affect local authorities. Already
it is 75% central funding/25% local funding, so a 1% increase
in a council's expenditure translates at the moment, on that gearing,
into a 4% increase in council tax. The more you push towards the
centre, the greater the impact on local council tax of any other
decisions that you might be making, including those on services
which are not within that national funding: housing, transport
and the other things that Jenny and I have both referred to. There
is an additional potential downside to, as it were, nationalising
the funding in the way that has, for example, happened to the
funding of schools, but I do not want to reopen that particular
argument. The system, basically, would be a national care guarantee,
locally delivered, locally accountable, and based very much on
local authorities working in partnership with NHS, carers and
third sector and, indeed, private sector organisations.
Q815 Dr Taylor: Before I move on,
I am delighted to hear you say, Jenny, that the tax-funded option
should perhaps remain. That was very much the message from our
previous witnesses. They disagreed with the assumption that we
cannot ask for more cash from the working age principle, provided
people can trust that they will get help when they need it, which
I thought was absolutely crucial. To move on to the nationally-uniform
assessment, ADASS says that "The Single Assessment process
has not been fully embedded across the Health and Social Care
System and needs to be in order to underpin [this] agenda."
Why will a new model work when this has been in place since 2001?
Ms Owen: The Single Assessment
System is a single assessment across health and social care. Although
there were different models that you could use, you would work
on your single assessment in every locality between health and
social care. It was not a single national assessment that worked
across the country; it was different in every place, depending
on what kind of system you used and the basis for it. The reasons
that single assessment between health and social care has not
worked very well across the country are many and varied but one
of them is not having compatible IT systems. We still do not have
IT systems that talk to each other.
Q816 Dr Taylor: As basic as that.
Ms Owen: It is really basic stuff,
yes. There is a specific thing about that, but the principle about
having a single assessment linked to a national assessment really
is the same. If you have a national assessment, you agree that
assessment criteria. You are still going to have people completing
that assessment, and those assessments are between the social
care professional and the individual. You would not have a scientific
absolute correlation—and I cannot believe that will ever
be the case—but you can create a national assessment system
where the same questions, the same criteria are used, in the sort
of way that we have the FAC (Fair Access to Care) criteria at
the moment.
Q817 Dr Taylor: Do you see computer
systems becoming compatible at any time?
Ms Owen: Between health and social
care?
Q818 Dr Taylor: Yes.
Ms Owen: I hope before I die!
Q819 Dr Taylor: Presumably you would
be in favour of something this Committee has suggested for a long
time, that there should be some merging of social care and health
budgets.
Ms Owen: I think we all would
agree there must be greater integration of working between health
and social care. How that looks? I do not favour, personally,
just structural solutions—I think it is more complicated
than that—but greater integrated working and the systems
and processes that underpin that are important.
| 
