Comprehensive spending review 2007. Key points

February 7, 2007 in Adults, Children, Disability

Mark Ivory guides you through the key issues and gauges the views of the social care sector in the lead-up to the March deadline for submissions

“This will be a very tight settlement – efficiency and productivity will continue to be significant issues,” says the Department of Health’s social care supremo.

David Behan, who as director general of social care has the task of taking the sector’s case to the Treasury’s comprehensive spending review, should know.

The unpalatable truth behind the diplomatic language is that it will be the toughest review yet – it had been expected in July, already a year late, and now the talk is that it could be delayed again until the autumn. It will set the pattern for public spending between 2008 and 2011, when the government’s purported generosity will become a thing of the past.

Since last summer the forces of social care have been grouping to launch a raid on the Treasury’s coffers when the final bids go in this March. The chances are that they will come away with a great deal less than they wanted as overall increases in public spending are expected to slow from 3.3 per cent year on year over the past 10 years to 1.9 per cent.

Doubts about the timing are the result of Gordon Brown’s leadership ambitions and his wish to put his own prime ministerial stamp on the next three years. It will prolong uncertainty about next year’s local government financial settlement, although for social care it is being billed as a “no growth” review and the Treasury will expect investment in new services to come from redistributing existing resources. The key words here are “efficiency savings”, achieved by cutting away bureaucratic fat and reinvesting the money in new, leaner services.

Few social care lobbyists are convinced. Most feel that they are looking into a yawning chasm between the lofty aspirations of policy and the stark reality of services that are often under-resourced and demoralised.

Anne Williams, who as vice president of the Association of Directors of Social Services marshalled the arguments for social care with central and local government colleagues on a DH committee last year, reflects the prevailing view that efficiencies won’t compensate for rising demand.

“There will need to be an above-inflation increase in funding to deal with the demographics, given increasing costs and rising expectations,” she says. “Our committee is meeting the Treasury this month, so we will learn then how far they accept our arguments about the growing numbers of frail, older people and the demography of disability, including longer lives and more complex needs.”

But she thinks there is room for further efficiency savings, which are expected to be demanded at an annual rate of “at least” 2.5 per cent of budget to be ploughed back into the front line. She mentions the more flexible delivery of intensive services in people’s own homes and the spread of telecare, whose array of sensors, monitors and phone lines linking homes to call centres is widely seen as an economical solution to theconundrum of independent living. One important study showed that telecare at home reduced the average stay in residential care from three years to one year.

Stephen Burke, whose older people’s charity Counsel and Care has brought together major stakeholders to lobby the Treasury, turned up the pressure early last year. He hopes that the review will redirect resources to preventive services, even if the evidence from pilots for individual budgets, Link Age Plus, and Partnerships for Older People Projects is still scant. Sure Start,

Burke points out, was a multi-billion pound “leap of faith” and he argues that prevention for older people should be viewed
similarly.

Like others he sees this review as part of a longer-term strategy to promote good outcomes for older people across the whole local government canvas of social care, regeneration, transport, adult education and housing, among other things. “I suspect that social care will get a better deal in the comprehensive spending review than was feared six or 12 months ago, but we need to show that we will continue to change and improve the way services are delivered,” Burke says.

This article draws on two Local Government Association reports, Meeting the Challenges Ahead (the LGA’s 2006 autumn statement) and Without a Care?

Major challenges

● Increased demand for services.
● Rising user expectations.
● Increasing demands from government.
● Costs rising above inflation.
● Improved services.
● Strengthening workforce.

The Guide

Comprehensive spending review 2007: The take home points

● Exact timing unknown – July had been pencilled in, already a year late, and now it could be as late as October. The CSR will set public spending for 2008-11.
● Overall, public spending increases will slow from 3.3 per cent in real terms annually to 1.9 per cent annually.
● Local government funding has gone up 40 per cent in real terms in the past 10 years but, excluding specific grants, the increase is only 14 per cent.
● Extra funding for social care above the expected inflation-linked increase is unlikely – further investment in services will have to come from “efficiency savings” and a transfer of resources from NHS acute services.
● Instead, the NHS has tended to transfer its debts, which totalled £1bn last year.
● Efficiency savings of “at least” 2.5 per cent a year are expected, more stringent than those imposed previously.
● Efficiency savings so far have tended to come from “back office functions” – in future they are likely to rely more on better joint working across the public sector, regional commissioning, and new, more flexible services such as individual budgets and extra care housing.
● According to government figures, every 1 per cent reduction in institutional care yields £3.8bn which can be reinvested across services.
● One source of efficiency savings has been the introduction of new technology – 97 per cent of local authorities are already “e-enabled”.
● Lighter-touch regulation and a reduction in the 1,000 performance indicators and targets should save money.

The case for a bigger slice for…

Older people’s services

● There will be 400,000 more older people by 2011, many of whom will need social care. They will have higher expectations than their predecessors.
● Numbers of over-85s will rise at about 2.5 per cent a year.
● Council-funded home care hours have increased by about 25 per cent in the past five years, a trend that is likely to continue.
● Council spending on care for older people went up 65 per cent in real terms between 1995 and 2005, another trend that will need to continue.
● Residential care for older people costs are rising by nearly 7 per cent a year.
● As eligibility criteria tighten, on current trends the 370,000 people with lower levels of need will be excluded altogether from services by 2009.
● Derek Wanless reported last year that spending on adult social care would have to rise from £10.6bn to £31.3bn (1.1 per cent to 2.1 per cent of GDP) by 2026, if the preventive, socially inclusive vision set out in Our Health, Our Care, Our Say was to be realised.

…Disabilities and Mental Health

● People with learning difficulties are living longer and the number using social services is rising fast: up 15 per cent from 2001-4 with the population aged over 65 up 31 per cent.
● The number of people using learning difficulties services is likely to rise by a further 12 per cent by 2011.
● According to the Local Government Association, additional investment of £300m a year will be required for learning difficulties services.
● The number of disabled older people unable to perform basic tasks such as shopping is likely to grow by 6 per cent.
● 82 per cent of councils are experiencing demand pressures on care placements for people with learning difficulties, higher than any other category.
● 25 per cent of the rising population of over-85s will develop dementia, a third needing constant care.
● Infrastructure for direct payments cost £24.5m this year.

…Children

● There are currently about 1,000 children’s centres, increasing to 3,500 in the 20 per cent most disadvantaged wards by 2010.
● A major source of child poverty, lone parent households, are set to increase fivefold in the next 20 years.
● High quality, stable public care up to the age of 21 will require an additional £250m a year.
● 55 per cent of families with disabled children live in poverty.
● Estimates suggest that it will cost more than £4bn extra for the government to achieve its 2010 target of halving child poverty, compared with the 1999 level.
● 2.5 per cent of the overall population are still classified as severely socially excluded.

…Other new costs

● Safeguarding vulnerable groups (Bichard).
● Minimum fostering allowance.
● Education and Inspection Act.
● Information sharing.
● Asylum seekers.

Contact the author
Mark Ivory

This article appeared in the 8 February issue of the magazine, under the headline “Who wants a piece”