Staying ahead – of the game

In a game of trumps, you discard if you’re not holding a good hand
or play your trump card to win. Local authorities can bring these
tactics into play with the government’s plans for efficiency
savings. They may not feel they’re holding the same suit as the
government – with its focus on national efficiency targets which
need to be translated into what makes sense locally – but it’s up
to them to find the trump card and deliver a more efficient service
on their terms. Otherwise they risk leaving the government holding
all the tricks.

This analogy comes from Andrew Webster, executive director for
social services at the London Borough of Lambeth, who says: “You
can either throw away things that you don’t care about much or you
can say I have a better way of doing it which will deliver at least
what is being asked for and more – that’s your trump card.”

Efficiency savings for local authorities were laid out in the
three-year spending review in July 2004, published alongside the
Gershon review, a cross-cutting review of efficiency in the public
sector. Annual savings of £20bn are expected across all
government departments by 2007-8, of which at least £6.5bn a
year are to be found within local government spending. Thirty-five
per cent of the £6.5bn is expected to be made through
procurement, particularly in adult social care, social housing and
children’s services, by 2008.

The situation is complicated by the fact that all government
departments have been set individual efficiency targets. So, by
2007-8 the Department of Health’s target is for £6.5bn annual
efficiency gains, part of which involves £684m from adult
care. The Department for Education and Skills has an annual
efficiency gains target of £4.3bn by 2007-8.

Local authorities must find annual savings of 2.5 per cent which
can come from any service, as well as contributing to the
government department targets. The problem lies in translating
specific targets at a national level to more general targets at a
local level.

Webster says: “If you are sitting in my position you can either say
it’s a big problem because of potential accounting difficulties, or
we can recognise this but pull those strands together at a local
level and deliver better value, more preventive social care. And we
can achieve the Gershon target at the same time as we improve the
service.”

In the meantime, DoH care services efficiency delivery teams are
visiting councils to look at how they can make savings from adult
social care. Chances are their recommendations will add up to
£684m and it will be hard for any local authority to dismiss
the teams’ suggestions.

But move this issue down the chain and it throws up another
complication – whose savings belong to whom? If social services has
saved housing a great deal of money, which department will claim it
as theirs? And a critical target in the NHS is to reduce bed
occupancy for people with long-term conditions, but social care
plays a part in achieving this. Webster says: “Are you interested
in just getting your department’s numbers right or do you want the
whole authority to work better? If it’s the latter then some
efficiency savings will be from elsewhere.”

Tony Hunter, president of the Association of Directors of Social
Services, argues that social care should very much be seen as part
of a whole-council approach. He says: “There will be certain
initiatives in social care and the wider council – especially
around ICT and procurement – that will overlap which is why they
need to be worked on together. Otherwise there is the risk that
initiatives could go off on their own momentum.”

But if agreeing savings locally seems hard, will it be possible to
achieve them regionally? One of Gershon’s suggestions for
efficiency savings was through regional procurement, a proposal
that has had a mixed reaction. A vision of large, one-size-fits-all
block contracts conflicts with the drive towards greater
personalisation of services which has been strongly advocated in
the adult care green paper, and could threaten the DoH’s push to
increase direct payments, and its latest plan for individualised
budgets.

Perhaps because Webster is at a London council where regional
procurement could arguably be easier to arrange, he believes it can
work in some areas: intermediate care services helping people
return home from hospital, secure children’s care and drug
rehabilitation are examples. He doesn’t see it working as well for
domiciliary care, particularly for ethnic minority communities or
for family support centres which tend to be linked locally to
estates, communities and schools.

“There are some people who have lots of reasons why this won’t
work. We could all sit in our localities saying we want to have our
own deals with our big suppliers because our needs are so special.
Or we could say there are things we want to change so let’s get
together and do it. Rather than it being just about negotiating a
better price we could renegotiate the services altogether.”

But some view regional procurement as harder to pull off in sectors
where there aren’t as many large companies operating – such as
residential care. Less than 30 per cent of homes are run by big
national companies, while 70 per cent are either single proprietors
with one home, or proprietors with two or three homes in a local
area.

Denise Platt, chair of the Commission for Social Care Inspection,
says: “It’s very difficult to look regionally at social care. When
I was social services director at Hammersmith & Fulham there
were some people in Fulham who had never been to Hammersmith! And
in rural areas, distances between villages mean that services have
to be for each village.”

For Platt, the future issue in policy terms is the expansion of the
domiciliary care sector. The sector is full of small businesses
already operating at cost. Regionally they don’t stand a chance
because they provide very local services.

“Take five domiciliary care agencies each with less than 20
employees, a couple of managers, a filing cabinet and a computer.
If they were to expand they’d need to take on people to support
that. But if they could buy into one organisation – maybe a social
enterprise that the local authority had set up – that acted as a
recruitment agent, paid the payroll, then it would save each one
doing it separately,” says Platt.

And by keeping agencies’ costs down, it would keep the costs down
of the services being bought by local authorities.

By the end of this month local authorities will have carried out an
annual efficiency statement looking back at the savings they have
already achieved. Now is a good time for social services directors
to decide their attitude towards the coming three years.

“You could treat it as an accounting exercise, is it just numbers
that add up? Or do you think about the policy objective, what are
we trying to achieve and how can we do it?” Webster asks.

Lambeth Council has made savings from older people’s services,
domiciliary care, looked-after children and meals on wheels, so
Webster can afford to sit on his laurels for a bit if he
wants.

“I could say that’s great, put a tick in the box. But there are
still things about the way we buy residential care and commission
services that we could do better and this efficiency process is a
good way of focusing on that and making sure we do it.” It looks as
though Webster has got a trump card up his sleeve.