How social care spending worsens inequalities between areas

By Colin Slasberg, social care consultant

Last year, the Institute for Fiscal Studies pointed out that the 10% of councils who spent the most in 2015-16 averaged £445 net spend per 1,000 adult population and the lowest spending 10% £325 – a difference of 37%. They searched for demographic factors that might explain such a large difference, but in vain. Such unexplained differences indicate the perpetuation of the ‘postcode lottery’ of provision highlighted by the Dilnot Commission in its 2011 report on reforming social care funding, despite the introduction of national eligibility criteria under the Care Act 2014.

The postcode lottery

But the problem is actually much worse than the IFS figures suggest. There are two factors that determine how much councils spend. The first is the number of service users the council serves, and the second is the average amount the council spends on them. Council A and council B might spend exactly the same per head of population. But council A might have more service users than council B but spend proportionately less on them than council B. People in council A will see their counterparts in council B getting rather more than they get. They will feel it to be unfair. They will believe the real test of equity is whether people get the same level of support wherever they live in the country. It is certainly the test that the Dilnot commission applied when it concluded there was a postcode lottery given that he saw ‘different people, with similar care needs, can receive very different levels of support from their local authorities’. And it is most certainly the acid test of whether the national eligibility criteria are working.

So if spend per service user is the best test of equity, what do we know? Changes in the national finance and activity returns make it possible to find out. Councils now report how much they spend in meeting long-term support needs alongside how many people throughout the year receive long-term support. Dividing one by the other tells us the average spend per service user.

Striking inequalities

The results are striking. The lowest spending council in 2016-17 was Salford, which spent £48.8m amongst 5,215 people, making an average of £9,400. Wokingham was the highest, spending £43.4m among only 1,775 people making an average of £24,500, over two and a half times more than Salford. An adjustment is required for regional differences in land and capital costs that result in variations in the unit costs of residential care. Once this has been done, the 10% highest spending councils spent 81% more than the lowest spenders – £20,200 against £11,100 per service user.

How can it be that if you live in Salford, you will receive so much less support than if you live in Wokingham when all councils are supposed to be working to the same eligibility criteria? The answer is, in fact, very simple. The eligibility criteria play no part in decisions about which needs to meet. Budget holders are given the responsibility by their councils to control spending. They do so by controlling the flow of needs that will be funded. It is then easy to dress the decision up in the language of the national criteria.

Adjusting need to budget

The key judgement under the national criteria is whether, because of a care and support need, a person’s inability to achieve at least two specified outcomes will have a ‘significant impact on well-being’. It always stretched credulity to think that such a loose phrase could lead to consistency. In reality, it’s an open door for councils to do as they always have and adjust need to budget. It is not impact on well-being that determines eligibility, but impact on budget.

The situation darkens even further once the reasons why spend per service user varies so much more than spend per population are explored. The key link is comparative levels of deprivation around the country. There is a very strong relationship between the level of deprivation and the number of service users per head of population.

Deprivation impact

Wokingham serves the most affluent community in the country and Blackpool the most deprived. Last year Wokingham had 13.9 service users per 1,000 population, while Blackpool had 29.9, more than double. There are all stops in between these two extremes. Two major factors are at play. The first is the effect of the means test – as deprivation goes up incomes come down so more people can enter the system. The second is that as deprivation goes up, so does prevalence of the range of health conditions that give rise to needs for care and support.

While Blackpool had far more service users, they spent an average of £12,900 on each of them (£14,600 when adjusted for regional costs). Wokingham spent £24,500 (£23,300 adjusted). An individual in Wokingham will get 60% more support than someone in Blackpool.

The numbers of service users and amount spent on each of them tend to even themselves out when it comes to spend per head of population. Blackpool spent £386 per 1,000 population last year and Wokingham £340.  Blackpool is made to appear the more generous. It’s very misleading.

Inverse relationship between spend and deprivation

Further analysis shows that there is an inverse relationship between spend per service user and a council’s level of deprivation (as measured by the government’s index of multiple deprivation). The five wealthiest councils – Wokingham, Windsor, Buckinghamshire, Richmond and Surrey – spent an average of £20,300 per service user in 2016-17. The five most deprived – Blackpool, Knowsley, Hull, Liverpool and Manchester – spent £14,900.

The link with deprivation means there is not only the injustice of great inequity, the system is compounding inequalities between communities. People in more deprived areas are more likely to gain entry to the system, but they will get much less support than their equivalents in wealthier areas . It may well be a contributory factor to the lower life expectancy in more deprived communities.

Grossly unfair

In February, the permanent secretary to the Department of Health and Social Care told the House of Commons public accounts committee that the service had sufficient money to meet all its statutory requirements under the Care Act. This is a statement that is always true, no matter how large or small the budget. It’s a cover up for a system that is grossly unfair, compounds inequalities and conceals the true funding requirements. And because it’s a system that requires ‘need’ to be standardised and compressed until it is ‘eligible’, it is also disempowering and depersonalising leading to very poor value for money support plans. It is a thoroughly reprehensible system.

There is an alternative to the way needs are assessed, resources allocated and spending controlled that would alleviate the problems created by the eligibility process, which I have set out in previous articles. It can only be hoped that those working on the green paper on reforming social care are alive to the evidence and have the best interests of the older and disabled people who rely on the service at heart.