Personalisation grant could be cut, warns think-tank

A £237m grant to help councils implement personalisation could be at risk from the cuts announced by the Treasury today, a think-tank has warned.

The New Local Government Network said part of the social care reform grant could be among £1.16bn of savings earmarked for council grants in 2010-11 by chancellor George Osborne and chief secretary to the Treasury David Laws.

NLGN spokesperson James Hulme said it would be “difficult to see areas” like the social care reform grant “not being affected by these reductions” though it was unlikely it would be cut completely.

The move will not touch councils’ general grant – the £29bn formula grant – but will come from specific funding streams, such as the reform grant. In addition, ring fences will be removed from £1.7bn of council grants, giving authorities some autonomy over where the axe will fall.

Hulme added: “I suspect that social care will be an area quite badly hit because of the figures we are looking at. It’s likely there will be a 10% reduction in grants over the next nine months which isn’t the 25% figure which had been bandied around but it’s a significant figure.

“It’s obvious that those cuts will lead to significant cuts in local authority budgets.”

The social care reform grant is worth £520m from 2008-11, with the biggest tranche – £237m – being allocated this year.

Jeremy Cooper, director of Impower, a consultancy that has helped a number of councils implement personalisation, said the government could be considering clawing back £50m to £100m of this year’s allocation, despite most having been committed already by councils.

He said that despite the coalition government’s commitment to personalisation, ministers could be influenced by evidence that the social care transformation programme, funded by the grant, has not delivered.

Concerns were also raised about social care cuts by Policy Exchange, a think tank with close links to the Conservative Party.

Henry Featherstone, head of its social care unit, said local authority social care budgets were likely to be “squeezed” because they were not protected. He said the government needed to look at “rolling” long-term care funding into NHS budgets to yield efficiency savings.

On Friday the Local Government Association published proposals that could produce savings worth up to £22.5 billion over the lifetime of this Parliament.

The LGA said the plans involved devolving power over public spending to local people, axing middlemen and stripping away unnecessary bureaucracy in the public sector.

It referred to the greater use of Total Place approaches, under which councils and other fellow public bodies work more closely to tackle local issues.

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