Local Authority Grants: Impact of Cuts

Lord Low of Dalston Excerpts

Thursday 9th December 2010 Lords Chamber

[Lord Low of Dalston]

My Lords, in his letter to local authorities, following the comprehensive spending review, the director-general of social care at the Department of Health wrote that local authorities had,

“enough funding available both to protect people's access to services and deliver new approaches to improve quality and outcomes”.

The additional £2 billion that the Government were putting into social care by 2014-15 would, he said,

“make it possible to protect people’s access to care, without tightening eligibility”.

He even went so far as to say that this is a highly positive settlement for social care, providing sufficient resources to protect people’s access to care and avoiding further restrictions to services. But at other points, he had the grace to admit that the settlement would be challenging. Perhaps one can be forgiven for thinking that this was nearer the mark.

There are some things to welcome. The £1 billion of extra funding coming from the health service should help to speed up the integration of health and social services at the local level, which seems to have taken for ever. Up to £300 million of this can be spent each year on reablement to help avoid the need for social care. The disabled facilities grant is to be protected, though it will no longer be ring-fenced, so what will happen to it is anybody’s guess. The challenging settlement should stimulate innovation in the delivery of services.

The negative side of the ledger is even more compelling. The CSR has treated local government particularly harshly. Central government funding of local authorities, as we have heard, is to decrease by 28 per cent in real terms over the next four years, down from £28.5 billion in 2010-11 to £22.9 billion in 2014-15, a reduction of £5.6 billion. This compares with cuts of 8.3 per cent across departmental budgets generally. This helps to put the extra £2 billion for social care into context. Cuts to housing, family support, transport and leisure will all have a wider impact on the care and support environment. The settlement presupposes efficiency savings of 3 per cent a year, but in adult social care alone, savings totalling nearly a billion pounds have been made over the past three years already, while eligibility thresholds have remained relatively unchanged.

In these circumstances the Local Government Association puts it mildly when it says that the front-loading of the funding reduction, coupled with the fact that adult social care has important links to other council services such as housing, leisure and transport means care and support faces a period of real challenge. This is all against a background in which social care is pretty much in crisis already. While expenditure on adult social care has increased over the past decade, it has not seen anything like the increase seen in health and education. This has led to a situation in which social services are falling further and further behind. An ageing population means that pressure on services can only get worse. A survey in community care recently showed that two-thirds of councils were already only providing social care to people in either critical or substantial need. It found that this figure would be 80 per cent by next year and that people are already predicting that future cuts would lead to many councils raising their thresholds to critical only.

As for the additional £2 billion, there are concerns about whether all of this will find its way to social care. The sums to be channelled via the NHS should get through as long as they are clearly identifiable locally and are the subject of specific local agreement. The other £1 billion is another matter. This half of the new social care funding is not ring-fenced. It is not difficult to imagine hard-pressed councillors and chief executives diverting it to help plug the gap in other equally cash-strapped areas.

Your Lordships would not expect me to close without saying something about the situation of blind and partially sighted people, who graphically illustrate the condition of social care provision today. Unless they have other disabilities, people living with sight loss are unlikely to receive much—if anything at all—in the way of help because their needs are likely to be assessed as only moderate or low. I invite your Lordships to pause and think about that for a moment because it has always struck me as absolutely extraordinary. It means that many people simply lose their independence for want of the appropriate rehabilitation and support.

The Department of Health stresses the importance of personalised support. Almost everybody agrees about that but personalised support which you cannot access because you do not meet the criteria of eligibility for help is no support at all. A fully personalised social care system can perfectly well continue to exclude from eligibility most blind and partially sighted people. In the context of personalisation, I should also like to say a word about the question of choice. There is evidence from the individual budget evaluation research that elderly people in particular were often worried that direct payments would impose unwanted burdens on them where their right to choose had not been properly explained. The Department of Health’s policy, as reflected in its vision statement, now seems to have changed to saying that personal budgets should preferably be delivered as direct payments. These positions are not necessarily incompatible. It would be possible for local authorities to express a preference for direct payments while still offering personal budget recipients a genuine choice, but it is easy to see how inappropriate pressure might develop, especially if it transpires that local authorities can make significant staff savings via direct payments.

The Government believe their social care settlement to be adequate. We shall see. However, it is absolutely essential to monitor what happens closely. I strongly urge the Government to be prepared to take corrective action if familiar problems of adequacy and access persist or, indeed, get worse.