Public Expenditure - Health Committee Contents



FURTHER INFORMATION FROM THE DEPARTMENT OF HEALTH (PEX 01B)

  The Department of Health's response to 23 November specific actions are listed below:

Q324/Q325: Examples of the sorts of social care services that will be paid for by the £1 billion from the NHS Resource budget

  The NHS will make £798 million/£922 million available for spending on social care in 2011-12 and 2012-13. Of this, £150 million/£300 million has been earmarked for re-ablement, which will help people to recover their independence after admission to hospital. This will be backed by new rules whereby NHS Trusts, from next April, will take responsibility for their patients for 30 days after discharge. Hospital Trusts, PCTs and local authorities will work together in order to ensure that avoidable readmissions do not happen within this time, and this will include putting in place a comprehensive system of re-ablement support.

  The remainder of the funding will be transferred to local authorities for spending on social care services to benefit health, and improve overall health gain. PCTs will work with LAs to agree where the money should be spent, with a shared analysis of need and common agreement on what outcomes need to be met. This will be a locally determined process, so that the funding best meets local needs. However, we would expect that PCTs and LAs would want to look at key elements on an individual's care pathway where individuals are at risk of high cost interventions if support were underfunded.

  With that in mind, we would expect the funding to be used to support the following social care services:

    — Practical support and prevention services, to maintain people's independence and reduce the risk of falls or accidents. This could include, for example, befriending services (to reduce isolation and improve mental health) and exercise and balance services (to keep people active and reduce the risk of falls).

    — The provision of equipment and minor adaptations (for example, grab rails or shower chairs). These can help ensure timely discharge from hospital, and reduce the risk of emergency admissions from falls. In 2000, the Audit Commission found that 14% of all delayed discharges were the result of a lack of equipment.[49]

    — Integrated crisis or rapid response services—for both frail older people, and those with mental health needs. Evidence from the Care Services Efficiency Delivery programme suggests that crisis response services can prevent unnecessary ambulance call outs and hospital admissions, and reduce the need for lengthy stays in residential care.[50]

    — Supported accommodation facilities—which can help to ensure that people are discharged from hospital or other health services at the appropriate time, and do not have to stay in a ward unnecessarily.

  We will set out further detail in the 2011-12 NHS Operating Framework.

Q328/Q329: A note on inefficiencies/cost variations in social care

Issue

  The Spending Review will be challenging for adult social care and we will be working closely with local authorities and the wider sector to identify and deliver efficiency savings.

  In the recently published Vision for Adult Social Care, we set out a framework that local authorities could use to get the best value for money from services. This is summarised below.[51]

Helping people to stay independent for as long as possible

  Preventing people's needs from escalating will help to delay people's need for intensive care packages, and reduce the costs of social care for individuals at risk of increasing levels of dependency.

  One way to achieve this is through re-ablement. Re-ablement services can help people to regain their independence after a crisis, and can have a significant positive impact on people's quality of life. A Retrospective Longitudinal Study on re-ablement, published in 2007, suggested that 53% to 68% of people left re-ablement requiring no immediate homecare package, and 36% to 48% of those continued to require no homecare package two years after re-ablement.

  Case studies suggest that an integrated crisis or rapid response service, that responds to people who have a crisis within a four hour period, could save an average of £2 million per PCT and £0.5 million per local authority by reducing ambulance call-outs, unnecessary admissions to hospital and unplanned entry to long term nursing or residential care.[52]

Providing care and support to meet people's goals

  Providing people's care and support in the most appropriate and cost-effective way is important to ensuring that the system is as efficient as possible.

  Telecare support can help people to live at home independently for longer by providing technologies that make their homes more safe and secure. Self-evaluations from three local authorities indicated that they could save around 1.5% per annum of their home and residential care spend by introducing integrated telecare support to people.

  Personalisation, and the roll out of personal budgets, also provides an opportunity to change the way that care is commissioned and can help to achieve better outcomes to individuals at the same cost. Devolving the commissioning and purchasing of services to individuals allows many service users to use their personal budgets or direct payments in creative ways—often purchasing innovative local services which can cost less than traditionally commissioned services. This approach requires wholesale change—a change of attitude by local authorities and staff, reform of financial and information systems, and reduction of inflexible block contracts.

  Variations in the proportion of local authority spending on nursing and residential care was a key focus of Use of Resources in Adult Social Care, which benchmarked performance across local authorities.[53] Of the total spend on services for people with learning disabilities in 2008-09, the proportion going towards nursing and residential care varied from 12% to 80%. For services for older people, the proportion of spend on nursing and residential care varied from 30% to 70%.

  Some of this variation may reflect local preferences and the needs of particular populations. However, some people are placed in residential care because there are few alternatives to meet their needs in the community.

  In its Vision for Adult Social Care, the Government set out how supported housing and extra care housing can offer flexible support in a community setting, which can provide better outcomes at lower costs than traditional high cost nursing and residential care models.[54] Better use of community-based services (for example re-ablement or home improvement and adaptations) can also reduce demand for residential care.

Maximising spend on front-line services

  The solid Spending Review settlement for social care means that local authorities should rigorously prioritise expenditure to ensure as much money as possible goes to those most in need. Authorities must therefore ensure they minimise spend on back office administration, sharing services with other parts of the public sector where appropriate.

  Local authorities should also look to minimise the extent to which care is provided in-house. The following graph demonstrates that there is significant variation in the extent to which local authorities commission in-house service delivery and external/independent provision. This example looks as residential care for older people.[55]

GRAPH 1

VARIATIONS IN PROPORTION OF RESIDENTIAL CARE EXPENDITURE FOR OLDER PEOPLE WHICH IS PROVIDED BY THE LA (OWN PROVISION), 2008-09


  There is also some evidence that in-house services are often provided at higher cost than those from the independent sector. The following table, from the Audit Commission report Under Pressure, looks at the variation in unit costs between in-house and independent residential care provision for older people.

TABLE 1

VARIATIONS IN SOCIAL CARE UNIT COSTS FOR RESIDENTIAL CARE[56]


Average gross weekly expenditure
Ratio of
maximum to
average

Minimum
(£)

Average
(£)

Maximum
(£)
Supporting older people in residential care provided by council 2.5136.99883.78 2,405.50
Supporting older people in residential care provided by others (per person) 1.5203.98435.03 720.64


  There are a variety of factors behind these variations, one of which is the efficiency of the service. However, there are a number of other factors which influence the unit cost of a service, including:

    — property prices;

    — the local wage market;

    — the supply of staff, and the terms and conditions of staff;

    — transport costs; and

    — the quality of the provision offered.

  Despite these limitations, such analysis provides a useful benchmarking tool for local authorities, who should be prepared to justify costs. As set out in the Vision for Adult Social Care, the Government believes that local authorities with substantial in-house provision should look to the market, including social enterprises, mutual and voluntary organisations, to replace them as a local service provider. There may be exceptional reasons for authorities to retain services, but separating responsibility for commissioning and providing services should become the norm.

Variations in unit costs

  Work by the Audit Commission has found variations in the costs paid for other services by local authorities. Examples of cost variances are shown below.[57]

TABLE 2

VARIATIONS IN SOCIAL CARE UNIT COSTS


Average gross weekly expenditure
Ratio of
maximum to
average

Minimum
(£)

Average
(£)

Maximum
(£)
Meals per older person receiving them3.0 1.0626.5882.23
Home care per older person receiving home care 2.052.29143.25 257.57
Supporting older people in nursing care (per person) 1.5240.00479.56 753.87
Average gross expenditure per day care session for older people 2.54.9527.35 72.14



  As noted above, there are a range of factors that influence the cost of a service, of which the efficiency of the service is one. The picture is complex and therefore it is not possible to estimate with any certainty how much of the variation in unit costs is related to inefficiencies. Indeed, some of the efficiency drivers noted above may lead to increased unit costs, due to shifts in where people are cared for. For example, reducing the number of people in residential care may lead to higher unit costs for residential services as the remaining users have higher needs.

  In addition, these figures should be treated with caution due to inconsistencies in the way that the data are collected and presented. For example, some local authorities will only provide intensive day care for people with high care needs, whereas others will offer a range of social activities for anyone. Both would be classified as day care, but would inevitably be delivered at very different unit costs.

  Despite these limitations, such analysis provides a useful benchmarking tool for local authorities. Under Pressure highlighted these large variations in unit costs and, whilst reiterating that unit costs are subject to a range of local variations and influences, urged local authorities to examine their data locally and conduct a self assessment about how money is being spent.

Conclusion

  We believe that there are a range of opportunities for local authorities to make savings in adult social care over the coming Spending Review period. Many of these will help to reduce the numbers of people needing care in a particular area; others will help to reduce the cost of care and limit variation between authorities. Local authorities will need to develop plans for reform, to reassure themselves and their communities that they are making the best use of available resources. The Department will support the work of authorities to deliver these efficiency savings by co-ordinating and disseminating support tools and best practice.

3 December 2010








49   Audit Commission, Fully Equipped, (2000). Back

50   See http://www.csed.dh.gov.uk/CrisisResponse/ Back

51   A Vision for Adult Social Care: Capable Communities and Active Citizens (Department of Health, 2010). Back

52   See http://www.csed.dh.gov.uk/CrisisResponse/ Back

53   Use of resources in adult social care: a guide for local authorities (Department of Health 2009). Back

54   A Vision for Adult Social Care: Capable Communities and Active Citizens (Department of Health, 2010). Back

55   Analysis of PSS Ex1 2008-09. Back

56   Audit Commission, Under Pressure, (2010). Back

57   Audit Commission, Under Pressure, (2010). Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2010
Prepared 14 December 2010