Councils’ cash crisis worse than last year

More than half of local authorities are
already in a worse financial position than at the same point last
year, according to a new survey carried out by the Association of
Directors of Social Services and the Local Government Association.
And a further 25 per cent anticipate no improvement on last year’s

The latest research, carried out in July and
published this week, underlines the pressures on social services’
budgets highlighted six months ago in a similar survey that
predicted a £205 million overspend in 2000-1 (News, page 3, 1
February). The new survey finds that, despite concerted efforts to
control costs, social services departments overspent last year by
£183 million.

Overall, the survey confirms the pressures of
need, demand, statutory duty, recruitment and retention, market
capacity, and cost increases faced by the social care sector.

It also shows that local authorities are
covering the shortfall by budgeting to spend above the level of
standard spending assessment “to the tune of some £1

ADSS resources committee chairperson Brian
Parrott said the findings “reinforced the scale of the budgetary
pressures” faced by social services departments and identified some
of the areas of pressure, including winter pressures, children’s
services and the short-term nature of government funding.

The report acknowledges the impact of the
government’s direct funding of winter pressures or health authority
transfers but identifies the “worrying knock-on implications” of
funding these services in future years.

Eighty-five per cent of authorities saw
additional health-related funding as significant for improving
their performance in dealing with delayed hospital discharges. But
more than half the authorities anticipate not being able to
maintain or increase their level of services during 2001-2.
Furthermore, half do not expect their share of the additional
promoting independence grant to cover the cost of additional care
packages entered into over the last winter.

The survey also identifies the particular
pressures faced by children’s services, which accounted for about
two-thirds of last year’s budgetary overspend. The ADSS and LGA
have welcomed the further central government consultation and
analysis being carried out in this area.

“We need to secure improved government funding
on a longer term, planned basis so authorities can plan for
investment in improved services rather than worry about the
fragility of short-term, one-time injections of money,” said
Parrott. “It is mainstream funding that needs improving.”

LGA social policy director John Ransford
added: “Although resources have clearly grown above inflation in
recent years, there’s a major gap now between resources available
and demand.”

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