10.3 The NHS Confederation has supported the extra funding for social care. We recognise the extremely challenging financial situation facing local authorities. The transfer of funds from the NHS to social care has been crucial in many areas in ensuring there is sufficient social care provision to meet people’s needs. However, we need to recognise that some areas have not been able to use the money taken from the NHS to pay for 46 Figures from House of Commons Library Deposited Paper 2012—0634, April 2012
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services to help tackle the need for intensive, expensive support. Instead, these funds have in many areas been used to paper over the cracks in the social care system. This risks storing up worse problems for the future.
10.4 Understandably, local authorities are now planning on the basis that they will have these funds and are becoming reliant on receiving this money every year. Any reduction in the funds available to them will make it even harder to meet people’s need for care, and could endanger services that local authorities and the local NHS have planned jointly. However, taking funds from the NHS budget to fill the funding gap for social care should only be a temporary measure and should not continue in the long term.
11.Responding to the Crisis in Social Care
11.1 Demand for health and social care will continue to rise, particularly with the increase in the number of very old people and adults living with multiple disabilities. The population of over-65s is projected to grow by 50% over the next 20 years. We must ensure that the health and social care system meets the needs of this growing demographic. In Papering over the cracks we argued that both greater funding and greater integration are necessary; neither will be sufficient on their own in ensuring a sustainable social care system.
11.2 A long-term, sustainable solution is needed, which increases social care funding for the growing group of people who have increased needs. In addition, in the short and medium term, a sustainable funding package for social care is needed which does not stop at bailing out areas that are in crisis, but that also enables investment in services which will save money by improving people’s overall health and independence. The ambitions of the social care reforms within the Care and Support Bill will only be realised if the funding challenges are solved.
11.3 The Dilnot Commission’s proposals are the most credible and practical solution on long term social care funding. The Government must commit to implementing them as soon as possible. It will cost the Government £2 billion a year to implement the Dilnot proposals. The Government must include these extra funds in the next Spending Review and clarify where it will find the money.
11.4 It is not sustainable to expect the funding shortfall of £2 billion for social care to come from the NHS. It is not possible to increase NHS efficiency savings by at least £2 billion a year on top of the existing requirement to save £4 to £5 billion a year for at least the next four years without severely affecting care.
11.5 There is widespread consensus that we need to make better use of resources and improve people’s experiences by ensuring more integration of care. Local authorities, NHS organisations, national organisations and government all have a role to play in ensuring we overcome the challenges in moving from aspiration to practical implementation of this aim.
October 2012
Written evidence from the Local Government Association and the Association of Directors of Adult Social Services (PEX 22)
About the Local Government Association
1. The Local Government Association (LGA) is here to support, promote and improve local government. 2. We will fight local government’s corner and support councils through challenging times, focusing our efforts where we can have real impact. We will be bold, ambitious, and support councils to make a difference, deliver and be trusted.
3. The LGA is an organisation that is run by its members. We are a political organisation because it is our elected representatives from all different political parties that direct the organisation through our boards and panels. However, we always strive to agree a common cross-party position on issues and to speak with one voice on behalf of local government.
4. We aim to set the political agenda and speak in the national media on the issues that matter to council members.
5. The LGA covers every part of England and Wales and includes county and district councils, metropolitan and unitary councils, London boroughs, Welsh unitary councils, fire, police, national park and passenger transport authorities.
6. We work with the individual political parties through the Political Group Offices. 7. Visit www.local.gov.uk
About the Association of Directors of Adult Social Services
8. The Association of Directors of Adult Social Services (ADASS) represents Directors of Adult Social Services in Councils in England. As well as having statutory responsibilities for the commissioning and provision of social care, ADASS members often also share a number of responsibilities for the commissioning
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and provision of housing, leisure, library, culture, arts, community services and increasingly, Children’s Social Care within their councils.
9. Visit www.adass.org.uk A Note on our Submission
10. We are pleased to submit a written response to the Committee’s inquiry and look forward to giving oral evidence on 23 October.
11. In anticipation of answering a number of questions on a range of different topics at oral evidence, this written evidence does not strictly follow the Committee’s questions as set out in the inquiry’s call for evidence. Instead it provides an overall commentary on the state of adult social care funding.
Commentary on Adult Social Care
The broader local government funding picture
12. Social care funding must be seen in the wider context of funding for local government as a whole. 13. The 2010 Spending Review set out real terms reductions of 28% in local government budgets for the four years to 2014–15. This compared to overall cuts of 8.3% across all departmental budgets. It is therefore no exaggeration to say that local government was handed one of the toughest settlements across the public sector. 14. The grant reductions were after taking account of the additional Formula Grant described in paragraph 22 below. In other words, without the additional grant the reductions in overall local government funding would have been even greater.
15. The very clear reality is that councils have had to face extremely tough choices about which services they can keep running. Local government continues to do everything possible to minimise the effect of these cuts, building on its record of delivering new and better ways of doing things in order to keep public services running.
16. As we have long argued, these difficult decisions are best made at the local level. Councils—working with their local partners—have a thorough and expert knowledge of their communities’ needs and continue to strive to ensure that scarce resources are targeted where they are needed most.
17. We have modelled the level of service provision that councils could be expected to be able to sustain if their revenue base were to be constrained within the spending levels set out by the Chancellor in Budget 2012. Our projections of all future sources of council revenue, and future service spending demands, show a likely funding gap of £16.5 billion a year by 2019–20.
INCOME VERSUS EXPENDITURE
£40,000 £45,000 £50,000 £55,000 £60,000 2010/ 11 2011/ 12 2012/ 13 2013/ 14 2014/ 15 2015/ 16 2016/ 17 2017/ 18 2018/ 19 2019/ 20 £ ( m ill ion)
Net Expenditure Income
Income versus expenditure
18. With social care and waste spending absorbing a rising proportion of the resources available to councils, funding for other council spending drops by 66% in cash terms by the end of the decade; from £24.5 billion in 2010–11 to £8.4 billion in 2019–20. This is the equivalent of an 80% real terms cut. And of course, these “other” universal services are those which play a key role in supporting an individual’s general wellbeing, such as libraries, leisure and transport.
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£0 £10,000 £20,000 £30,000 £40,000 £50,000 £60,000 2010/ 1 1 2011/ 1 2 2012/ 1 3 2013/ 1 4 2014/ 1 5 2015/ 1 6 2016/ 1 7 2017/ 1 8 2018/ 1 9 2019/ 2 0 £ ( m ill io n)
Social Care - Children Social Care - Adults
Environment (inc Was te) Money available for all other s ervices
19. If local government funding is constrained in the next Spending Review period along the same lines as it has been in this one, expenditure on adult social care will absorb 45% of council budgets by 2019–20, up from about 30% in 2010–11, For county councils, for whom adult social care costs already absorb closer to 40% of their budgets, the squeeze will be even more acute: our modelling shows that they would need to spend 52% of their budgets on adult social care by 2020 to meet projected demand.
20. These are significant figures and it is therefore crucial that we do not conflate the two issues of funding for the system, and funding for reform. In our view, the latter is about taking forward the proposals contained within the care and support white paper, and the Dilnot Commission, to secure the changes that are needed to make our care and support system clearer, fairer and more transparent. But system reform is a longer-term game, and will fail to get off the ground if we do not address the more immediate issue of system funding.
21. We are absolutely clear that immediate funding for the system and funding for reform must go hand in hand, and that securing a sustainable financial future for local government as a whole must therefore start with getting funding for care and support right.
The Social Care Funding Picture
22. The government did respond positively to some of the central arguments for additional resource made by local government in the run up to the last Spending Review, allocating new social care funding, and funding from the NHS to support joint working between health and social care.
NHS
Formula Grant Given “to support integration between health Given “in recognition of the pressures on the and social care services at the local level…[the social care system in a challenging fiscal money is] specifically for measures that support
climate” social care, which also benefit health”
2011–12 £530 million 2011–12 £800 million 2012–13 £930 million 2012–13 £900 million 2013–14 £1 billion 2013–14 £1.1 billion 2014–15 £1 billion 2014–15 £1 billion
23. This additional money was certainly welcome, but its impact would only be truly felt if we were in a settled state. The picture presented above makes clear that we are not—a point further reinforced by the ADASS Budget Survey, which shows that £1.89 billion has already been taken out of adult social care budgets over the last two years.
24. In terms of the money transferred through the NHS to adult social care, the ADASS Budget Survey shows that, in 2012–13, £284 million has been used to offset pressures and cuts to services, £148 million has been invested in new social care services, and £149 million has been allocated to working budgets.
25. Where budgets have been cut those decisions have not been made lightly. Indeed, the LGA “Spending and Saving Survey” from March 2011 showed that more than half of councils (57%) were seeking to protect adult social care, and 79% of councils had decided not to change the lowest eligibility band at which they
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offered services in 2011–12 (notwithstanding the fact that the majority of councils are already operating at “substantial” and “critical” only).
26. The implications of reduced budgets are exacerbated by demographic pressures, particularly amongst adults with learning disabilities as well as older people. The ADASS Budget Survey reports that this pressure stands at £403 million for 2012–1347and we expect demography to continue being a major pressure in the years ahead. Between 2010 and 2030 we expect a 64% increase in the population aged 75 and over, and a 32% increase in the numbers of adults aged 18–64 with learning difficulties. As a result, over the same time period we project expenditure on adult social care to increase by 84%, from £14.5 billion to £26.7 billion. Within this there is a 100% increase in expenditure on adults over 65, from £7.7 billion to £15.4 billion. However, despite relatively smaller numbers, the projected increase in expenditure on adults aged 18–64 stands at 66% between 2010 and 2030, from £6.8 billion to £11.3 billion. This is highly significant.
27. Whilst one of the routes councils have taken to secure efficiencies has been holding down the price of care placements and homecare hours to protect frontline services, this option is simply not sustainable. We recognise that providers will not be able to recruit staff and quality of care will be at risk if there is not an urgent government response to the funding pressures faced across the adult social care sector.
28. Examining what is happening underneath the global figure for expenditure also reinforces the need for urgent reconsideration of the level of resourcing for adult social care.
System Pressures