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Supporting People has been compared to the introduction of community care -Êboth introduced a government grant to replace a benefit entitlement. But while in the first few years of community care there was enough funding to effect the transition, under Supporting People it looks like the cuts will start from day one.

When administering local authorities received their grants -Êlater than expected -Êon 20 February, they were shocked to discover that a "savings adjustment" had been applied. Some councils will have to make cuts of 3 per cent in the first year of Supporting People and many by about 2 per cent. The level will be even higher when the final sums are calculated in July. Savings will have to be found from existing services.

Supporting People project director Bert Provan has consistently promised that all eligible legacy funding will be transferred to providers in the new Supporting People grant. He says: "It is now expected that there will be a range of savings accrued within year one following the review process, which has always been a key element of Supporting People."

Schemes due to start in the year ahead have been hit hard. Almost no floating support schemes have been funded nationally, despite 50 per cent matched funding commitments. In some councils, such as Bristol, the allocation was less than that needed to fund support linked to new Housing Corporation schemes, throwing some developments into jeopardy. An appeal process has been instigated and the Office of the Deputy Prime Minister is receiving a "vast amount of calls" on the subject. In cases such as Bristol's, it has identified administrative errors and may put in adequate funds.

The ODPM has kept to a promise that charges to existing clients cannot rise above inflation. To justify cuts, it says there will be "declining obligations" -Êexisting clients will have services paid for under the Supporting People grant and not from councils' funds. But it also implies that new service users will have to pay more.

However, the costs to local authorities could rise if more service users become entitled to housing benefit. This is because the ODPM has ensured that all service users on housing benefit are exempt from charging. It says: "We are aware that many services have sprung up that may not be in line with the Supporting People strategy and other related strategies." This suggests they could be targeted for cuts and excluded from a promise to maintain existing services with Supporting People money.

Bristol's Supporting People manager, Shaun Fitzpatrick, says: "We agree that reviews should be robust. But, given we have far more need in all user group areas, reducing costs of contracts is not much of an option. Most services are long standing, well run and meet the council's strategic aims." He adds: "Most of us are not geared up to undertake reviews immediately."


Before scheme reviews can start in earnest, there is a requirement to:

• Appoint new staff.
• Develop new scheme review processes.
• Pilot validation visits.
• Accredit all providers.
• Collect management information.

To add to the difficulty, the first performance indicators and quality framework self-assessments will not be available until summer. The service indicator of cost effectiveness is not even mandatory in year one.

Little time is left to find savings if notice periods are to be honoured. Local authorities will have problems if they have already issued contracts to providers in line with the original timetable set by the ODPM. Its model interim contract required a year's notice before changes could be made, except in cases of major default. Most local authorities are taking up options such as bringing forward reviews, not passing on inflation rises and reducing notice periods.

Meanwhile, many providers are unsure of how much they will be paid this month. This prevents them giving notice of their charges to service users and undermines confidence in the Supporting People system.

Most disappointing for backers of Supporting People is that the pessimists may feel vindicated. The advice to maximise transitional housing benefit was right from the start to the end of the scheme. The reason is simple - once the Treasury has control it always seeks ways to reduce the budget. If providers have not built in some fat, there will be lean times ahead. 

Neil Miller is an independent consultant who provides specialist advice to local authorities and providers on the Supporting People programme. Contact him at nj.miller@virgin.net

Websites

For more on Supporting People go to www.spkweb.org.uk/