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SOCIAL SERVICES NORTH WEST
MEETING ON 21 DECEMBER 2001 AT WARRINGTON
REPORT OF THE CO-ORDINATOR
KEY SERVICE / FINANCIAL PRESSURES
1. Matter for Consideration
Responses by Ministers to letters sent on behalf of SSNW expressing concern about the level of funding available to personal social services and resulting financial pressures.
2. Introduction
Members will recall that at the previous committee meeting it was agreed, following from the latest report on financial pressures, that the Chair write to relevant Ministers to express concern about Government funding for social services, and the consequent on going financial pressures being experienced especially with regard to children’ services. The response on behalf of Stephen Byers (Secretary of State for the Department of Transport, Local Government and the Regions) and from Jacqui Smith (Minister at the Department of Health) are attached, and the key points outlined below for members information.
3. Information
3.1 Councillor Morris's letter (Appendix 1) expressed members' concerns about the limitations on current funding of social services authorities in the Region. The point was made that despite extra resources put into this year’s settlement, there was clear evidence from the recent survey (done jointly by the Local Government Association, Association of Directors of Social Services and Council Treasurers) that funding is still insufficient. The problems of structural under funding, excess expenditure, the need for longer term more reliable funding, rising costs and demands in the residential care sector for children and the adult care sector, and pressures on the learning disabilities budgets were highlighted. Acknowledgement was made of welcome developments, such as the commitment to additional resources in the next two years. However, these do not fully remedy the financial shortfalls, nor do they address the growing crisis in children’s services, despite local authorities' constant improvement in performance.
3.2. Ministers thank SSNW for our letters and state that they are aware of the problems facing social services departments in the North West and elsewhere. Both refer to ‘substantial increases’ in the level of funding in recent years. Alan Whitehead, Parliamentary Under Secretary of State, responding on behalf of the Department of Transport, Local Government and the Regions, (Appendix 2) goes on to say that money has started to be provided to enable authorities to make headway in coping with these problems, and further increases in grant have been built into the Spending Review 2000 to enable this to continue. He refers to the extra money made available earlier this year 2001/02 of £576 million which will be followed by more in 2002/03 along with significant increased in the ring fenced grants for social services expenditure.
3.3. Stephen Byers and Alan Milburn recently announced a major cash investment of £300 million over 2001/02 and 2002/03 as part of a 'cash for change' programme with the aim of ending the widespread incidence of delayed discharges (or ‘bed blocking’ as they persist in calling this problem). The Department is also seeking ways to make the distribution of grants fairer, and is currently considering the next steps following responses to the Green Paper on alternative approaches. They aim to publish a White paper this year.
3.4. Jacqui Smith, Minister of State at the Department of Health, refers (Appendix 3) to the 7.3% increase this year which includes the extra £100 million announced in October to tackle the problems in providing nursing home places, intermediate care beds and intensive care packages to help older people live at home. (An extra £200 million has been announced for next year). The Minister underlines the fact that since 1996, the overall level of funding has increased by just over 17.8 % after full allowance is made for inflation. She goes on to say that the Government has announced a review of the Standard Spending Assessment formulae to ensure that the allocation system is fair and transparent, and officials are currently engaged in discussions with the Local Government Association regarding a work programme to facilitate this review. Finally Jacqui Smith emphasises that, as already announced, resources for the social services will increase by an extra 6.3% next year.
3.5. It was particularly gratifying to be able to meet with Councillor Rita Stringfellow and other leading members of the LGA at Bolton recently. In response to the opening remarks by Councillor Morris, Councillor Stringfellow said that the LGA was continuing to actively lobby the government on the issue of the big gap in resources. The £300 million additional funding for capacity planning was helpful, but did not address the underlying severe financial deficit faced by authorities.
3.6 The presentation on financial issues, made at the meeting by Deputy Chair Councillor Keith, highlighted the fact that social services consumes the second biggest slice of local authority resources, and that the constant pressure of need and rising costs of provision outweighs our efforts at efficiency. Councillor Stringfellow emphasised all the work the LGA was doing in lobbying for extra funding for personal social services. She went on to say that local government as a whole is committed to addressing social care issues, and cited the contribution of £80 million from the DTLR toward the £300 million.3.7 On 4 December 2001 Secretary of State for local government Stephen Byers dashed hopes of a financial shot in the arm for social services authorities. In response Sir Jeremy Beecham LGA Chair, after welcoming the overall increase of 7.4% in funding announced in the local government finance settlement, expressed serious concerns about the absence of new money for social services and the further use of ring fenced grants to allocate funds to councils. Sir Jeremy also expressed the hope that the forthcoming Local Government White Paper will restore the freedoms and flexibilities that councils need to meet the needs of the people they serve.
3.8 Jeni Bremner, health and social affairs project manager at the LGA, - who members will remember attended the recent LGA SSNW meeting in Bolton - has said that "This is what we expected and it does not address the underlying deficit." It is clear that the allocation has not altered from that outlined in the 2000 Spending Review, despite the considerable and well-publicised pressure that services for children and the elderly are under. The increase for social services nationally next year is 5.4% compared to this year, and the total government grant to social services for next year will be £9,231 million. The figure is lower than the £9,344 announced in the spending review in 2000 because of a transfer of money (to the Children and Families Court Advisory Support Service for guardians and the National Care Standards Commission).3.9 Members will recall the findings of the recent LGA/ADSS/Treasurers report (as reported to the SSNW Committee in September), which showed that 75% of authorities overspent their allocated SSD budgets in 200/01 and that 60% of this overspend was within children’s services. The value of the specific grants has nearly doubled compared to 2001/02, but would not cover council’s costs of taking on additional care duties - such as their extra responsibility for care leavers aged 16-18 - and this despite the huge overspend on children’s services budgets. The new preserved rights grant for funding the care of those who entered residential care prior to 1 April 1993, is also not enough to meet the cost of assessments (estimated by the LGA as three times higher than government estimates)
4. Conclusion:
4.1 The Region’s overspent social services departments will be under even greater financial pressure and next year's grants will only meet either the extra costs of inflation or rising demand. Ring-fenced grants are both bureaucratic and inhibit local authorities' ability to respond to local need and develop joined up services. New government initiatives - such as the much welcomed White Paper on Learning Disability Valuing People - will simply mean that authorities will have to carry out more complex tasks with new duties with no new money and less flexibility.
5. Recommendations
5.1. Members are asked to note the above report and consider the statements made in response by Ministers.
5.2. Members may wish to consider whether SSNW should write again following the announcement of next year's grants, to express continued concern about both the shortfall in funding, in particular for children’s services, and the increase in Specific Grants which limit choice in allocating money to meet local need.
Appendix 3: Reply from Department of Health on Key Service / Financial Pressures
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