Service user outcomes ‘at risk’ from council plans to target personal budgets for savings

Some service users are receiving a direct payment rate that is too low to meet their care and support needs, a National Audit Office report found

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Councils risk poorer outcomes for service users by targeting personal budgets for cuts, the National Audit Office has said.

A report by the watchdog found many local authorities expected personalisation to deliver cost savings next year. However, it warned the level of planned spending reductions may not be achieved without putting service user outcomes at risk.

Auditors pointed to examples where councils had cut costs by making changes to personal budgets. This included setting direct payment rates at the same level, or lower than, the rate a council paid providers through commissioned contracts, rather than the market prices available to service users.

By definition this will save money, but according to Care Act guidance local authorities should base payment rates on user needs not savings targets, the report said.

According to section 11.25 of the Care Act guidance, rates for direct payments should not be lower than the amount required to purchase care and support locally. Rates should be set at a level that is sufficient to meet a person’s eligible needs through quality local provision.

Some service users reported being unable to buy enough care using their local authority’s direct payment rate, the report said. This meant people were having to make higher top-up payments than expected based on their financial assessment, it added.

‘Struggling to support’

Frontline staff told auditors they were struggling and did not have enough capacity to support and review service users adequately. This lead to difficulties for service users, such as being unable to find effective cover when a personal assistant was on leave, the report said.

Evidence submitted by Citizens Advice suggested the lack of support for people on direct payments could lead to poor outcomes for users with direct payments.

“For example, users who do not understand their obligations as employers can get into debt if they do not factor tax obligations into their budgeting. The Care Act requires local authorities to give users who choose to employ a personal assistant clear advice on their responsibilities,” the report said.

The report recommended that the Department of Health took steps to improve its understanding of the savings targeted by councils and their implications. The government should also improve support for national initiatives that promote local market sustainability.

‘Significant savings still needed’

A Department of Health spokesperson said: “Through the Care Act, we have put personalisation at the heart of care and support so that people can choose the options best suited to their needs.

“We take our responsibility to understand system-wide pressures and the impact of personalised commissioning very seriously. We will consider the National Audit Office’s report carefully.”

Izzi Seccombe, spokesperson for community and wellbeing at the Local Government Association, said: “Local authorities have a responsibility to review the social care needs of individuals and this may sometimes mean adjusting personal budgets if a person’s abilities have improved, or declined.

“Councils are facing increased funding pressures and are determined to work individuals and service providers to help people get the support they need. Significant savings will still need to be made, which will further impact on the size of personal budgets. The next two years will be especially tough.”

The National Audit Office report is based on evidence collected from interviews with directors, managers, frontline staff, service users, carers and providers at 12 local authorities.

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