17 March 2006
Local authorities have made efficiency savings, yet ever-increasing social care demands continue to put pressure on their budgets. It's time to come up with a fair and sustainable system of funding
Social care budget figures published this week make stark and uncomfortable reading. English councils are projecting spending £1.7bn more on social care services than central government has bargained for, despite substantial efficiency savings, according to the survey Social services finance 2005/06. The black hole into which social care finances can disappear grows ever larger.
The report says it all: on the children's care side, increased demand for foster care and increased demographic pressures on services for children with learning disabilities are driving a large proportion of councils' budgets into overspend.
Behind that lie significant increases in unit costs for residential care across all sectors, additional legal fees for the increasing numbers of looked-after children cases we are dealing with, and extra infrastructure costs connected with direct payments.
Meanwhile, adult services are struggling with demographic pressures, above-inflation rises in residential and nursing home costs and continuing uncertainties in the entire health economy concerning NHS overspending.
These, compounded by the uncertainties created by the Grogan judgment on nursing care funding, all threaten to destabilise budget-making and service planning for some of our oldest citizens.
Health and social care are two sides of the same coin: underinvest in one and you overstretch the other. Nobody should underestimate the scale of the problem. The report not only raises concerns about the past year but reveals the deeply worrying extent of the pressures that will be taking place in the financial year to come.
Surprised? Figures from the Office of the Deputy Prime Minister have confirmed that local government is leading the way in making efficiency savings in the public sector. More than £180m was saved in social care budgets in 2004/05 and ploughed back into frontline services.
Yet there are several reasons for the severe funding pressures. The first is that our population is ageing and the number of people requiring care is increasing. By 2007 there will be more people over 65 than under 16 (in many areas this is already the case). By 2035, one-quarter of the population will be over 65.
Medical advances have increased the life expectancy of young adults with severe physical and learning disabilities, and carers are living longer, requiring increased support from their local authority. The costs of contracts with the independent and voluntary sector are outstripping inflation. The average increases are 4.2% for nursing and residential care, and 4% for home care. The implementation of the Every child matters green paper is uncovering more children in need of care and many councils are also reporting an increased demand for foster care.
The government's recent white paper, Our health, our care, our say, emphasised the importance of social care in allowing people to retain greater independence and control over their lives and put the emphasis on prevention rather than cure. The Association of Directors of Social Services and our partner organisations support, and have campaigned for, this approach.
People should get the care they need and deserve, delivered at the right time and in the right place. The reality, though, is that the vision has not been backed up by sufficient investment. This failing was identified when the white paper was only green, and the government insisted that its revolutionary approach to caring for older people would be accomplished within existing budgets.
Local councils and directors of social services will continue to do all they can to reduce the pressures on both the people who rely on services and council tax payers. We will continue to strive for further efficiency savings, but with the amount of people in need of help from their local authority increasing by the day, it is time for a fair and sustainable system of funding.
It is particularly important that this message is picked up not just in the Department for Education and Skills and Department of Health, our two 'home' departments of state. It should be taken by them back into the depths of the Treasury where thinking has already begun on the 2007 Comprehensive Spending Review.
It is a message that will also hopefully add substance to the long-term thinking that Sir Derek Wanless and his colleagues at the King's Fund are carrying out on financing services for older people.
The impetus to rebalance health expenditure away from the cash-hungry acute sector to the resource-starved community sector is stronger now than it has been in a long while. That impetus needs to be encouraged, nursed and developed during the coming hard-to-predict two years. There is too much at stake to let the matter rest.
Julie Jones is president of the Association of Directors of Social Services. The survey is published jointly by the ADSS, the Local Government Association and the Society of County Treasurers
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