LETTER TO
THE CHAIRMAN
OF THE
COMMITTEE FROM
THE DEPARTMENT
OF HEALTH
(PEX 01A)
PUBLIC EXPENDITURE INQUIRY
On 23 November, I gave evidence to the Committee
along the Secretary of State for Health and Sir David Nicholson.
I am writing to clarify one of the remarks made during that session.
At Q348, you asked whether the Department's
efficiency assumptions for social care assumed an increase in
income from charging. I replied that they did not. This was not
accurate.
Our efficiency work has assumed that, in general,
local authority charges will rise in line with inflation. We know,
however, that demographic pressures will mean additional people
entering the social care system over the next four years. With
charges rising in line with inflation, this implies above-inflation
increases to the income received by local authorities, despite
no significant policy change to their charging policies. Such
above-inflation increases to income, arising from demand, form
part of our efficiency assumptions.
In addition, we have assumed some very limited
policy changes, leading to slightly greater levels of income from
charges than through demand increases alone. Income from these
policy changes also count towards our overall efficiency assumption.
However, the additional income from these changes is extremely
small when set against the overall efficiency opportunities, and
overall social care spend. They account for less than 3% of the
assumed efficiency opportunities by 2014-15, and less than 0.4%
of social care spend.
I hope the Committee finds this clarification
helpful.
Richard Douglas CB
Director-General, Policy, Strategy & Finance
3 December 2010
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