12 October 2007
News that adult social care funding will be frozen in real terms was sweetened slightly by the confirmation that the government will consult on a radical overhaul to the current system.
The spending review announced that direct funding to adult social care departments from the Department of Health would increase by just £190m over the entire CSR period, an increase of 2.6% which will bring total direct funding to £1.5bn by 2010-11. The Treasury's preferred inflation measure – the consumer price index – has ranged between 1.8% and 3% this year.
Anne Williams, president of the Association of Directors of Adult Social Services told Public Finance: 'As expected, the settlement leaves us in a tight position. The new funds are a start, but there's still a long way to go.' She added that a further £650m of previously ring-fenced DoH grants was also being rolled into the general local government revenue support grant, which put them in danger of being siphoned off elsewhere.
Social service departments had long expected the CSR to deliver little or no extra funds in the short term. But the sector was pleased to receive confirmation of the government's intention to publish a green paper, giving a 'radical rethink' to the current system of adult social care.
Announcing that green paper consultation and public engagement events will be launched in the new year, the CSR document stated: 'The government believes there are real opportunities for reform within a system that shares the cost between the individual and the state and that provides both universal and progressive elements.'
That was taken to indicate favour for Derek Wanless's 2006 proposal for the King's Fund whereby a basic minimum package of care is provided free for all with 'top-ups' to a defined maximum matched by the state. Those who cannot afford to make top-ups would receive additional means-tested benefits for that purpose.
There would also be quality improvements to current services and Wanless estimated the full extra cost to the Treasury at £4.3bn. But Wanless argued that £2.6bn of that could be paid for by redistributing existing means-tested benefits that are nominally spent on care services anyway such as Attendance Allowance.
King's Fund chief executive Niall Dickson told PF: 'My guess is that the Treasury wouldn't have thought about this without having some discussions with other departments about the redistribution of other benefits. The government have hopped over a major hurdle in recognising that the current system is not good and doesn't work.'
Dickson added that he did not expect any new system to be in place until at least the next CSR period in 2012.
PFoct2007
