ILLUSTRATIVE EXAMPLES OF THE DIFFERENT FUNDING
STREAMS THAT SUPPORT AN INDIVIDUAL WITH SOCIAL CARE NEEDS
To put this into context, approximately £120
billion of public sector funding will go into supporting people
with a health, housing related support, disability related and/or
social care need in 2010-11. Of this only £14 billion (or
12%) will be from Local Authority Social Care budgets. This is
shown in the chart below.
Expenditure on adult social care increased significantly
in the ten years between 1998-99 and 2008-09. The increase after
adjusting for inflation is 50%. However the graph below shows
that after adjusting for inflation most of this increase was prior
to 2005-06 and the increase has slowed considerably for the last
three years from 2006-07. This is despite the growing number of
people who require care, the increase in the number of people
requiring intensive high cost care packages and cost pressures
within the social care sector.
FIGURE 3.1
GROSS EXPENDITURE ON ADULT SOCIAL SERVICES
1998-99 TO 2008-09
Expenditure between 2006-07 and 2008-09 has
increased by £917 million. This represents an increase of
7.4%. However after adjusting the figures using the GDP deflator,
the real increase during this period is only £176 million
or 1.8%.[48]
The most significant area of growth during this period has been
for services for people with learning disabilities. This demonstrates
how local authorities have been delivering efficiencies to offset
the demographic pressures on their budgets.
Local authorities have been delivering between
2-3% efficiency savings per annum in recent years and expect to
deliver 3.0% savings in the current financial year 2010-11.
The largest single challenge for social care
budgets is the rising number of people that will require social
care in the future. This is a reflection of the fact that people
are living longer including those with profound disabilities.
Local government's best estimate of the extra cost of demography
is about 4% each year although this may be an understatement of
the likely pressures of local authorities.
What are the implications of the government's
plans for the interface between the NHS and Social Care?
As we have explained on page 2, adult social
care is a relatively small proportion of total spending on health
and social care and support (£120 billion). Most of that
spending is agreed by single organisations who are relatively
narrow in their focus. Yet that spending and the services it pays
for helps individuals who want seamless services which ignore
organisational boundaries. There are some excellent examples of
integrated working between health and social care but they are,
in general, exceptions other than the rule. They also tend to
focus on specific areas of spending such as adults with learning
disabilities or with mental health problems. Most of the £120
billion spent on health and social care is spent on older people
with long term problems and/or complex problems. Very little of
this is spent in an integrated way. This means that public resources
are at times wasted or spent unnecessarily. Poor quality continence
services as identified by the recent Royal College of Physicians
report not only wastes NHS resources but will increase in the
longer term the number of people who enter residential care.
In the light of this situation, the commitment
expressed in the NHS White Paper to much closer working between
health and social care is very welcome. ADASS also welcomes the
responsibilities proposed for local authorities in particular
their leadership role with GP consortia through the Health and
Wellbeing Partnership Board. However, this will only work if strategic
decision making and resources are brought together into a single
place.
SOCIAL CARE
RESOURCE ALLOCATION
What is the expected impact of the local authority
settlement on social care budgets?
Local authorities are planning for potential
spending reductions over the next four years of up to 40%. This
reflects the fact the Treasury are looking to reduce Departmental
spending by 25% but are protecting some areas of spending. This
means that other areas will have to find greater savings. In addition,
local authorities face significant spending pressures notably
the demographic pressure described earlier.
Local authorities will have a much better understanding
of their financial situation firstly, when the Government publishes
its Spending Review on 20th October, and, secondly, when the Government
announces the provisional Local Government Finance Settlement
in late November/early December. Local authorities will make their
own decisions on how they will manage spending reductions. However,
if those announcements do entail resource reductions of up to
40% then it is inevitable that adult social care will face significant
spending reductions.
How does the local government funding formula
reflect differential demand for social care services in different
areas?
There is general consensus that the local government
funding formula is complicated and not transparent. Within the
formula there are separate elements for older people's personal
social services and for younger adults' personal social services.
This sum can have little relationship to actual spending. For
example, one County Council with relatively low levels of deprivation
received formula grant of £20 million in 2009-10 towards
funding both elements (£13.5 million for older people and
£6.5 million for younger adults) yet spent £153 million
net of income on adult social care including overheads—the
rest being funded by council tax or specific grants. In contrast,
a unitary authority with a relatively high level of deprivation
received formula grant of £87 million and spent £52
million. Current funding arrangements are heavily influenced by
the level of deprivation and taxbase resources per head in each
area.
What is the impact of this system on the budget
allocations of a representative sample of social service departments?
Because deprivation is generally the most important
element within the local authority funding formula then local
authorities in prosperous areas will spend less on average per
head of population than those with much higher levels of deprivation.
In general, this is reflected in spending on adult social care
because adult social care is such a significant proportion of
total local authority spending as explained earlier.
SOCIAL CARE
SERVICES
What scope exists for social care services to
manage demand, cost and efficiency within constrained budgets?
Local authorities have demonstrated their ability
to deliver cash releasing efficiency savings of between 2 and
3% each year. Local Government's submission on adult social care
to the Government's Spending Review argues "it would be reasonable
given the huge financial pressures facing the public sector to
expect local authorities to deliver annual cash releasing savings
of 3% per annum". The submission warns that this would be
"challenging" and that this would "include genuine
efficiencies but to get to 3% would also have to include measures
such as raising the level of income collected from charges and
in some cases eligibility criteria."
The submission contends that "without a
change to statutory responsibilities, achieving savings on the
scale of 25-40% is simply not feasible. Any attempt to get close
to this sort of reduction would have significantly adverse effect
on very vulnerable people. It is also important to recognise that
the vast majority of adult social care is spent on those who either
limited resources or no resources to pay for their care themselves."
There is scope to make significant savings across
health and social care if all activities are looked at in the
round. In the past there have not been satisfactory arrangements
in place to ensure how this will happen in each area. Directors
of Adult Social Services have indicated their willingness to work
together with local NHS decision makers but any progress is dependent
on a reciprocal response from the NHS locally. Such a response
was very patchy. ADASS welcomed the publication of the Health
White Paper because it has highlighted the importance of integrated
working and the pivotal role of local government. If this is to
be effective, then it is crucial that implementation leads to
the right outcomes in each area. This must include incentives
and sanctions which lead to co-operation and genuine partnership
working in all areas.
Savings come from an integrated approach because
nearly all health and social spending is on individuals with long
term conditions most of whom are older people. Improving the standards
of health care will have a dramatic impact on the need for social
care if they are applied consistently across the country. For
example, standards in the treatment of people with strokes, continence
problems or dementia are generally too low and far too inconsistent
across the country. Intermediate Care could be used in a much
more effective way both in avoiding hospital admissions and in
limiting them. At the moment, older people are going into hospital
with a fall and coming out with a continence problem which is
then leading to them being admitted into residential care. That
continence problem can be treated cheaply and could often have
been avoided in the first place. Savings from both hospital care
and residential care can be made if the right quality of health
care is in place. It is essential that implementing the White
Paper ensures that these changes happen. The emphasis on national
prescribed outcomes in the White Paper is therefore especially
encouraging.
What are the implications of social service budgetary
pressures on the interface between health and social care services
in a representative sample of areas?
If adult social care services are unavailable
then this will have a direct impact on the National Health Service.
Poor support for carers is likely to have a direct impact on the
health of those they care for and also on themselves. Waiting
lists for social care packages will have a direct impact on the
discharge of patients from hospital and in extreme cases can cause
total paralysis of the hospital system. The Government in the
NHS White Paper has highlighted the importance of improving health
outcomes so that they are comparable with other countries. As
they recognise this is not just about the quality of health care
but also the wider contribution that local government and society
more widely can make. If this contribution is limited or focused
solely on reacting to the most extreme situations then this will
have a profound impact on the aspirations to improve the health
of the nation and for people to age successfully.
We would also like to draw attention to arrangements
with regards to Continuing Health Care. ADASS believes that future
arrangements for the delivery and governance of NHS Continuing
Healthcare must be robust. We believe there is an urgent need
for the risks and challenges inherent in NHS continuing healthcare
to be fully understood and considered in discussions between PCTs,
emerging GP consortia and local authorities especially in the
light of the changes that are proposed in the White Paper. We
believe there is a role for Health and Wellbeing Boards to foster
a joint approach (across local authorities and GP consortia) to
commissioning care for people in receipt of NHS CHC and for people
who have high levels of need but do not necessarily meet the criteria
for fully funded NHS care.
September 2010
48 GDP Deflator as per PSSEX1 Final Report 2008-09. Back
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