Most care chiefs sure of meeting efficiency targets, survey reveals

Social care directors believe they can meet the government’s efficiency demands through better commissioning, a Community Care survey shows. However, some argue success will depend on money from the comprehensive spending review. Mithran Samuel reports

This week’s Community Care survey reveals most adult care directors are confident of delivering significant efficiency savings from 2008 to 2011, the next government spending review period. The finding comes at a time of frenetic debate between central and local government in England over the sector’s funding requirements.

While the Local Government Association and Association of Directors of Social Services have focused on current and future funding needs, our survey clearly shows councils believe that existing resources can be better spent.

Overall, two-thirds of adult services directors believe they will deliver 3 per cent annual efficiency savings, matching the government’s target for councils announced in last December’s pre-budget report. Only one of the 30 respondents felt they would not hit the target.

But children’s services directors were divided: of 13 respondents, seven were confident they would make 3 per cent savings, with five doubtful and one thinking they would not.

In 2005-6, councils in England made efficiency gains of £203m in  adult social care and £76m in children’s services, making a total for social services of £279m. This represents a 1.7 per cent efficiency saving on social services expenditure in 2004-5 of £16.3bn.

Overall, councils are on track to meet the 2.5 per cent efficiency target for their services as a whole but social services in many areas have not contributed savings at this level. Efficiencies from social care vary between the 150 councils with responsibilities for the sector.

For instance, Nottinghamshire Council made £12.5m in efficiency gains in adult social care in 2005-6 from the county’s £19.6m savings, corresponding to 64 per cent of the total; but Wiltshire made just over £900,000 from adult care from a total £5.1m (18.5 per cent).

Andrew Cozens, strategic adviser for children, adult and health services at the Improvement and Development Agency, says it will be possible for councils to deliver the 3 per cent target with little contribution from adult or children’s  services. “It’s possible to make these savings by looking at back office services [such as human resources or finance] across the whole council that don’t impinge on adults’ or children’s services.”

However, regardless of how individual authorities distribute efficiencies, there seems to be a belief, particularly in adult social care, that significant savings can be made, notably through improving the commissioning of services.

Seventy-eight per cent of adult directors say one of their three main methods to achieve efficiencies is improving commissioning; of children’s directors, 92 per cent gave the same answer. Last month’s annual state of social care report by the Commission for Social Care Inspection said that although commissioning had improved since the previous year’s  report, there was a long way to go. It diagnosed inadequate financial planning and appreciation of costs, and mixed practice in analysing needs, demand and supply, and said providers of specialist services were largely dictating costs, which were “high and increasing”.

Martin Green, chief executive of the English Community Care Association, says commissioning skills are inadequate in local government and commissioning is insufficiently strategic: “They are using the term commissioning and what they are really doing is purchasing.”

Green says councils have responded to the budgetary problems in adult social care by squeezing fees to providers – a trend, he says, that can no longer continue, as fees in many cases no longer meet the costs of care. He says: “The problem in funding is translating into more bad decisions in terms of squeezing more out of a sector that’s already squeezed.”

Tony Hunter, co-chair of the ADSS resources committee, says there is scope to use fees to make efficiencies by paying differential increases to providers based on quality.

Although he denies Green’s charge that councils are merely “purchasing” services, he says commissioning must become more strategic, especially given the government’s vision for adult social care. He says: “The authority’s role will be to understand enough about people’s preferences to be able to create markets which provide a range of choices, from which people can purchase directly.”

Last year’s white paper on health and social care called for councils and primary care trusts to make joint long-term strategic needs assessments of their populations. The paper’s key aim is to shift resources from acute to preventive services, and purchasing power from councils to individual users. Both shifts offer the holy grail of improving independence and outcomes for users, while making better use of council resources. More prevention should delay need for more intensive services, while early evidence from schemes such as the In Control pilots suggest individuals purchasing their own care may be more efficient than councils.

However, getting there from the current position, in which financial pressures are forcing councils to restrict services to those in the most need, is a big challenge. Green says this will require transitional funding – to invest in preventive services, while traditional services are maintained to cater for those in acute need. Hunter agrees, but says such a move would rely on the government’s willingness to invest in social care in this year’s comprehensive spending review.

Andrew Webb, co-chair of the ADSS children and families committee, says a similar issue exists in children’s services. He says savings on high-cost services for the low number of children with complex needs could be made if commissioners replaced expensive out-of-area placements with local services.

Funding for such children is split across several sources, including the care system and child and adolescent mental health services. Webb says improved co-ordination between councils and PCTs will save money. He adds: “It will lead to joined-up local services which will be cheaper and help keep children in their communities.

If I were to develop a locally-based service for the needs of one child in 10 placed externally I would make a big efficiency saving.”

Although some councils will be able to do this from within their own resources, others will need investment from the Department for Education and Skills, he says. So, it seems, councils are ready to shift patterns of care to improve both outcomes and value for money, as demanded by government.

But to do this successfully, they will need the comprehensive spending review to deliver investment for adults’ and children’s services.

Government guidance distinguishes between efficiency savings and cuts. The former means:

● Reducing the value of inputs (money, people, assets) for the same level of service.
● Increasing service outputs for the same level of input.
● Increasing inputs for a proportionately greater increase in outputs.

Councils are required to submit annual statements detailing the efficiencies they have achieved in the preceding year and those that they expect to make in the following year.

The 2004 spending review set councils a target of making 2.5 per cent annual efficiency savings from 2005-8, around £3bn.

Savings made in 2004-5 count towards the target, and councils are now on course to meet it a year early.

In last December’s pre-budget report, chancellor Gordon Brown announced that councils would face a 3 per cent annual target from 2008 to 2011.

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Mithran Samuel

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