Care minister in the dark over future funding of adult social care

Alistair Burt tells sector leaders he will find out how social care will fare in government spending review when George Osborne delivers it

By Rachel Schraer and Mithran Samuel

Care minister Alistair Burt has said that he will not know what funding settlement adult social care will receive in George Osborne’s government’s spending review until the chancellor delivers it in five weeks’ time.

Burt made the admission to sector leaders in a speech to the National Children and Adult Services Conference last week, where the issue of government funding for care had been one of the dominant issues for debate.

“Funding is still unclear,” he said. “As I’m sure you know I’m not in a position now to go making any promises about the future of funding for social care. The truth is that I will find out what the funding is when you find out, when the chancellor stands up in Westminster to deliver the autumn statement.”

Demand for additional billions

This will take place on 25 November, and will set government spending plans from 2016-2020, following year-on-year cuts to local authorities from 2011-16. The impact on council budgets is difficult to determine because of changes to the local government finance system (see analysis, below).

Ahead of the annual conference of social services leaders, the Local Government Association and Association of Directors of Adult Social Services had urged ministers to find additional billions for adult social care to meet rising demands for care, fund new policies such as the national living wage and invest in preventive services.

The two associations said that money previously earmarked to implement the Care Act funding reforms from April 2016 onwards should still be spent on adult social care now those reforms have been delayed until April 2020.

While it is believed that the Department of Health is sympathetic to at least some of the case for more funding, Burt’s words suggest its influence on the final settlement will be limited.

‘Sustainable future’

In a letter to the LGA announcing the delay to the reforms in July, Burt explained the decision by saying that they needed to be implemented in a way that created “a sustainable future for the health and social care system as a whole”.

Reminding Burt of these words following his speech, Adass president Ray James challenged the minister on how a sustainable system could be achieved in the current funding environment.

In response, Burt said the Treasury was not short of information on the extent of demands on adult social care, driven by the growth in the number of people with multiple long-term conditions, learning disabilities and dementia, people in local areas.

“Submissions have been made about the facts on the ground,” he said. “We will wait and see what the outcome is.”

Burt admitted that the scope for savings from adult social care were limited as “care is expensive and the workload is rising”, but said: “Efficiencies can be found in new ways of working which mean improvements in care and financial savings.”

He cited efforts to integrate budgets with health, the use of outcomes-based commissioning of home care in Wiltshire and a first contact system in Calderdale that has enabled 97% of requests for assistance from adults’ services to be diverted towards community solutions or long-term care.

He said he had been surprised in his five months in post about the extent of variations between areas. “There are people doing things that need to be shared across the piece. So the advice I would give – though I scarcely presume to give advice after five months in post – is to look at the examples of what is being done and the opportunities being created.”

Camhs is ‘top priority’

Burt also said that improving mental health care for children and young people was his top priority and said that £1.4bn in additional funding allocated to child and adolescent mental health services from 2015-20 would “soon start to make a big difference”. This echoed the comments of DH director general of social care Jon Rouse, who earlier had told the conference that the money offered a “once in a generation opportunity” to transform children’s mental health care.

On this issue, Association of Directors of Children’s Services (ADCS) president Alison O’Sullivan asked whether preferential access to mental healthcare for care leavers would be considered.

This group has already been awarded preferential access to housing and education to “compensate” for difficult beginnings, and would benefit from better access to mental health services, the ADCS president said.

Burt welcomed the suggestion, but said that services for care leavers was not his policy area as it was the responsibility of the Department for Education.

Spending analysis

Funding for adult social care currently comes from five main sources; the government’s main grant for local authorities, known as revenue support grant; councils’ share of business rates raised and retained locally; funding from the NHS channeled through the Better Care Fund (BCF) pooled budget; council tax, raised locally; and charges from service users, set and collected locally.

The spending review will concern the first four sources. George Osborne has already announced that the revenue support grant will be phased out by 2020. In its place, councils will be able to retain all of the money they raise through local business rates, about half of which is currently given to the Treasury and redistributed locally.

Currently the Treasury collects more from councils in business rates than it gives back in grant. However, Osborne has said that councils will be given additional responsibilities in return for this additional cash, which may restrict or even reduce funding for adult social care. Also, while most councils will be able to lower the current rate they levy on businesses, only those with an elected mayor will be able to raise the rate, and then only with the consent of local businesses and by only 2p in the pound.

There are also fears that local areas with lower business rates revenues will lose out. While Osborne has said that the existing system that transfer resources from business rich to business poor areas will continue it is unclear how this will apply in future. This should be determined by the spending review.

Councils’ ability to raise money from council tax is currently limited by rules requiring local authorities to hold a referendum of the local population to sanction rises in excess of 2%. Councils have also been able to accept a grant equivalent to a 1% rise in council tax in return for freezing rates locally. The spending review will determine whether and how these arrangements will continue.

Funding from the BCF, unlike the above mentioned sources of local government revenue, only goes to adult social care. The government has said that it plans to increase funding to the NHS by £10bn above inflation from 2014-15 to 2019-20.

NHS leaders are fiercely opposed to any of this £10bn being siphoned off to adult social care through the BCF as they believe all is required to meet NHS demand pressures.Instead they believe additional funding for adult social care should be found separately.

In his speech, Burt said that the additional money for the NHS would go into community health services and not just acute hospitals. But he did not explicitly state whether any of it would go towards social care.

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5 Responses to Care minister in the dark over future funding of adult social care

  1. Bob Ferguson October 19, 2015 at 2:10 pm #

    Perhaps Mr Burt should have consulted CQC, who seem to be in the know about the spending review. In their recent State of Care report, they said:

    “Soon after this report is published, we understand the Government’s spending review will set out plans for mitigating the impact of the national living wage on the care sector.”

  2. Gerald October 20, 2015 at 11:15 am #

    The NHS is winging about the £10 billion is it , well what about all the millions that they have already saved by changing the critterions for care and making the Public pay for care under the means testing scheme. Nursing homes have a had a dramatic reduction in placements and other services have been put under strain unnecessarily.
    This will NOT result in any savings overall.

  3. E Bowman October 20, 2015 at 12:34 pm #

    I would love to hear from social workers in Calderdale who have had ‘97% of referrals ‘diverted’ away from them, so now only have 3% left – they must have lots of time on their hands. But I don’t understand what he means. OK, so loads have been diverted towards ‘community solutions’ (whatever they are), but diverted to ‘ long-term care’? If you need long term care you will probably have to come through a local authority won’t you? Where are people needing ‘long term care’ being diverted too?

  4. Julian Hume-Kendall October 21, 2015 at 1:51 pm #

    Burt…..“Efficiencies can be found in new ways of working which mean improvements in care and financial savings.”

    In other words keep upping the standard, and we will keep paying you less.
    Really???….Really??? are these guys for real????

    Organising a pxss up in a brewery comes to mind

  5. H. McAleer October 21, 2015 at 2:55 pm #

    It amazes me that Governments both north and south of the border think that the growing need for care in the community can be funded out of fresh air. Some of the poorest people in our society are being financially assessed to pay charges that are ever increasing. These charges will deter some people in great need from applying for support because of cost. Agh….. is this the idea? Come on you chaps in Holyrood and Westminster just tax the people who can afford to pay through income tax!