Banking crisis could offer opportunity for the care sector

Government leverage with the banks could help quicken the pace of personalisation, argues local government commissioning expert Geoff Ettridge

The economic crisis being endured by the UK is likely to have a long-term impact on the provision of social care and other public services.

Consumer inflation, while projected to fall next year, is running at 5.2%, which is considerably higher than was applied when local authority budgets were set lower returns on deposits and from stocks and shares – not to mention the potential loss of millions of pounds in Icelandic banks – will reduce income from local authority investments and the banking bail-out is likely to put increased pressure on public spending in future years.

In these complex circumstances there is a risk that many local authorities will concentrate more on managing their immediate budget difficulties than strategically looking at the opportunities that could come with the upheaval in the banking sector that could, in the longer term, help reduce the pressure on council’s social care budgets.

Although accelerated by the events of the past few weeks, funding pressures in social care – whether through the increasing costs of intensive support packages for looked-after children or the growth in domiciliary and residential care for older people as a result of an aging population – have been rising for several years. To address these pressures the government has adopted policies such as the personalisation of adult social care and expansion of foster care services, to transform public services and try and stretch its limited resources further.

Pace of change

While recognising that this is a major endeavour, there has been frustration in some quarters of government at the slow pace of change – particularly around the reluctance of some authorities to grasp the personalisation mantle.

But perhaps these extraordinary times could offer opportunities to establish new partnerships that could help accelerate the transformation of the care sector.

For a partnership to be effective, there needs to be a commonality of interests that are best met through collaborating with others. Rather perversely, it is possible that it is the banking sector, which has put so much financial pressure on local authorities, that could soon be in a good position to make a contribution to its modernisation.

The rescued banking sector, in return for the investment of public money, will be required to start making competitive loans to small businesses (including social care businesses). All banks will also need to lend money more responsibly and perhaps invest more time, effort and expertise in keeping businesses out of trouble and thereby less likely to default on their repayments. As the care economy will be growing over the foreseeable future and the sector is well regulated, it could become increasingly attractive as a place for the making of safe investments.

Local trade boost

The personalisation agenda will also bring new opportunities for high street traders. Traditionally, the reform of social care has looked at how to make more use of councils’ universal services. These have tended to be defined quite narrowly to include such services as libraries, sports centres and adult education. But why couldn’t they broaden their horizons and look at the businesses and services in their local area? Shops, banks, post offices, cafes and pubs can contribute to creating choices and enhancing the quality of life for local people. These local service providers – many of which will be small businesses with business loans – could soon be seeking additional finance, or needing to cope with a recession.

The requirement to help these businesses survive presents an opportunity for the banks’ business managers and the councils’ town centre managers and care commissioners to work together with traders to identify new markets or ways of attracting more customers into the high street. Opportunities for joint working could include initiatives such as Chichester Council’s Go Easy Improving Access Award, or schemes such as local currency projects in Totnes, Devon and Lewes, East Sussex that aim to stimulate the local economy and may benefit people and families on low incomes. Initiatives such as these could be introduced with a partner from the third sector.

In recent years the care sector and its investors have been able to draw some comfort from securing local authority contracts or operating in markets where demand has largely been in balance with, or exceeding, supply. This will all change when local authorities begin to agree fewer, if any, block contracts, and as an increasing number of service users start making their own arrangements for care and support.

New environment

In this new environment, councils and banks will share an interest in ensuring that good services remain available and profitable: the banks are well placed to assist with funding to support expansion or diversification the banks and local authorities together can ensure that businesses are managed and marketed properly.

The case for change is widely accepted but the devil will be in the detail of its implementation. This agenda presents the possibility of a win-win situation for local authorities and service users. Key to its delivery, however, will be the ability of the wider market to respond to new business opportunities – local authorities working with local banks may be well positioned to help the market respond.

Essential information on personalisation

How the credit crunch is affecting social care


Case study

Watford New Hope Trust: Hertfordshire scheme offers hope in worrying times

The model being suggested by Geoff Ettridge would take partnership working in social care to a new level, but there are already some good examples of joint working between business, local authorities and voluntary organisations. One such project is Watford New Hope Trust, which has been developing projects to support homeless people in Hertfordshire since 1990.

The trust employs 72 staff and 120 volunteers across 10 projects in the Watford area, including offering outreach work, tenancy support and training and employment opportunities. It has a recycling workshop staffed by homeless people that restores wooden furnishings back to their former glory, with proceeds from their sale funding the project. A gardening scheme helps the group gain horticultural skills and qualifications that could lead to work, while a charity shop sells the products. More than 600 people a year benefit from the services.

The recycling project also makes small items such as bird boxes, tables and cupboards. Clients are referred from the charity itself, Stonham Housing Association, probation services and other agencies that come into contact with the homeless. The project is overseen by supervisor John Swallow (pictured below with service users). About 50 clients a year attend one morning or afternoon session at least once a week.

Although revenue from the trust’s commercial activities is an important contributor to its annual turnover of £1.5m, it also receives grants and donations from big businesses such as John Lewis and Barclays Bank, local churches and community groups as well as Hertfordshire Council and three borough councils.

Geoff Ettridge is the director and principal consultant of Capacity Builders (Social Care) and previously worked for more than 20 years as a senior local authority manager responsible for the strategic planning of care services and service development.

Watford New Hope Trust


Something for everyone

Why creating partnerships with the private and voluntary sectors could help achieve the goals of personalisation, benefiting both the service user and local authority.

● Creating choices outside of the traditional care services will promote independence and social integration.

● Giving people more control in their lives can improve their ability to cope – this could delay or reduce their need for formal care services.

● Care plans that are put together at a time of crisis can overstate the ongoing care needs. Allowing users to modify support to match their changing needs could address the problem of the over-provision of services which is costly in both the short and long-term because it can reinforce dependency.

● Defensive care plans, such as those that include 15-minute visits, are costly and provide very little care users in control of their care may prefer to have longer visits less frequently that would be cheaper overall.

This article is published in the 23 October issue of Community Care magazine under the heading How social care can beat the crunch

More from Community Care

Comments are closed.