Adult Social Care and the Spending Review

John JacksonCo-Chair Resources Network

Scope of the presentation• What is the Spending Review?• Financial contextIssues for consideration: • What have we achieved since the last Review in

2010?• What happens to local government will impact on

adult social care• Demography and complexity of need• Unmet need• Pressures on providers• Number of people using services• Can we make further savings?

What is the Spending Review?2010 review:“Spending Review will involve more than the allocation of resources. While it will rightly focus on reducing Britain’s record deficit and restoring sound public finances, it will also provide a platform to consider new and radical approaches to public service provision.”

What is the Spending Review?• Is the activity essential to meet Government priorities?• Does the Government need to fund this activity?• Does the activity provide substantial economic value?• Can the activity be targeted to those most in need?• How can the activity be provided at lower cost?• How can the activity be provided more effectively?• Can the activity be provided by a non-state provider or by

citizens, wholly or in partnership?• Can non-state providers be paid to carry out the activity

according to the results they achieve?• Can local bodies as opposed to central government provide the

activity?

What is the Spending Review?• We do not have much information about the 2013

review• Both DH and LGA advise that it will focus just on

2015/16• Autumn Statement has set out the financial

context…• Starting from the 2010 settlement in which local

government’s grant was reduced by 28% (even after extra formula grant for adult social care) compared with overall reduction of 8%

Financial Context• Total spending in 2015/16 and 2016/17 will

continue to fall at the same rate as in the current spending review period

• Spending on health, schools and overseas aid will continue to be protected from further reductions

National totals – 2015/16, 2016/17

7

2010SpendingReview

2 moreyears

What have we achieved since 2010? Budget Survey• Delivered 7% (£1bn) savings in 2011• Planning to do an extra £890m this year• £688m efficiency savings; £77m charging;

£113m service reductions• Cost of demography estimated at £403m

2012/13 (3%). 80% funded.• NHS money used: £248m offset pressures/avoid

cuts; £148m new services; £149m increase budgets (increased demand)

Position of local government• Net spending on adult social care £13 bn • 34% of total local government spending (£39 bn)• This proportion is increasing• It is also significantly bigger in some authorities –

those with particular demographic pressures already and in all County Councils

• Significant reductions in local government funding will impact on adult social care. There is no choice in that.

• There is some evidence that adult social care has been protected at the margin – and most of demography has been funded

Demography I• In 2010 we suggested that the cost of

demography was 4% per annum. • Some challenged this as too low.• Survey shows that current estimates are rather

less (3%)• DH assumptions in 2010 were seen as too low

by us. • We need as much information as possible

Demography II: LGA Funding Outlook for Councils 2010 - 30Population•64% increase in population over 75•32% increase in adults 18 – 65 with a learning disabilitySpending•Adult social care £14.5 bn - £26.7 bn (84%)•Over 65s £7.7 bn - £15.4 bn (100%)•18 – 65 year olds £6.8 bn - £11.3 bn (66%)

Unmet Need?• Some patchy evidence that demand is growing

much faster than demography would suggest

Oxfordshire perspective:• 16,000 people over 85• 2,000 people supported by the County Council• POPPI data suggests that nearly 11,000 people

over 85 need help with one activity of daily living• Therefore 9,000 people are either paying for this

care, relying on informal carers or struggling• What is happening elsewhere?

Pressures on providers• Significant savings have come from reducing the

cost of care through robust procurement. • This will not be able to continue. Providers are

challenging prices• Most providers pay their employees at or just above

the minimum wage• Social care is not a particularly high value sector of

the economy• There may be scope to challenge costs in some

specialist parts of the sector but this will be limited• What other intelligence do we want to put on the

table?

Number of people supported

Number of people supported

Number of people supported• What is our view on these trends?• Is this an indication that our strategies are

working?• Does it reflect a move away from prevention

and early intervention?• Does it mean that limited resources are forcing

local authorities to focus on those people who really do meet our (restricted) eligibility criteria?

To what extent can we make further savings?• We have told DH (and the Health Select Committee) that it is

unreasonable to assume that we can continue to make 5% efficiency savings

• There are real risks about major financial problems, quality issues increasing and major repercussions for the NHS

• However, in 2010 we did say that we could deliver 3% efficiency savings. Will this be our position this time around?

• What are the likely areas to achieve this? How realistic is it to assume that prevention and early intervention will deliver savings?

• To what extent can we expect savings to come from joint working with health?

• New Use of Resources document being produced by a working group led by SCIE

Issues for action/consideration• Need evidence on demography• Need evidence on unmet demand• What is happening to the number of people receiving

support?• Provider perspectives?• What are our views on the trends of the number of

people supported?• To what extent can we make further efficiency

savings?• What are the implications of welfare reform?• Interaction with the implementation of Dilnot?• Should we bring forward the next Budget Survey?

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