Social services fear new finance deal will leave them out of pocket

Many social services departments face shortages of millions of
pounds thanks to the local government finance settlement announced
last week.

Despite the new formula that guarantees departments an annual
above-inflation increase of at least 3.5 per cent for the next
three years, some local authorities feel the settlement will not be
enough to meet existing spending levels.

Overall, the social services and education budget is to increase by
6.2 per cent next year. But it will not be distributed evenly.
Under the new formula, 27 councils will have their budget increases
pegged to the 3.5 per cent floor, while 38 councils will receive
the 8 per cent maximum rise.

Early indications are that this will result in a moderate shift of
resources from the South East to the North and Midlands. London
boroughs and the South East will receive a 5.4 per cent and 4.5 per
cent average increase in funding respectively, those in the
Midlands and North West will receive 7.1 and 6.6 per cent.

Councils are to analyse the settlement before reporting back to the
government, but it seems likely some will have to look for savings
through service cuts.

Julie Jones, director of social services at Westminster Council,
said its increase of 3.5 per cent would leave her department with a
budget deficit of £3m.

“I think London boroughs are going to have to look at both service
cuts and potential council tax rises,” she said.

“I already spend well above SSA [standard spending assessment] and
the council now faces a difficult choice whether to take money from
other places to continue funding social services.”

Surrey Council also expects to be hit. David Munro, executive
member for social services, said any shortfall would force rises in
council taxes and threaten some schemes.

Although David Behan, chairperson of the Association of Directors
of Social Services, felt the new formula appeared to help social
services in general, he acknowledged that those receiving the lower
increases would experience “immense budgetary pressures which could
lead to service cuts”.

However, he welcomed the new ring-fenced grants to tackle systems
capacity, workforce training and recruitment and retention issues.

From April, the SSA is to be replaced by “formula spending shares”.
The new formulae used to calculate each authority’s FSS will give
greater emphasis to ethnicity, deprivation indicators, levels of
domiciliary and residential care, and the cost of foster care.