SOCIAL SERVICES NORTH WEST

MEETING ON FRIDAY 21 JUNE 2002 AT BURY

REPORT OF THE CO-ORDINATOR

KEY SERVICES / FINANCIAL PRESSURES

1.         Matter for Consideration:

To report on the financial developments affecting social services authorities in the North West since the report in March of this year.

2.         Introduction

Within a few days of the Social Services North West meeting with North West MPs in Westminster in March, Health ministers were publicly acknowledging that the Government would have to address the growing discrepancy of increases in funding between the NHS and social services.  This was confirmed in the April budget announcement which included 6% more for social services from 2003-04.  This most welcome increase has however to be viewed alongside continued (and unacknowledged) pressure in children’s services, an increase in the Employer’s National Insurance contribution, and the Government’s intention to legislate to make councils responsible for the costs of delayed discharges from hospital.

3.            Information

3.1.            The last meeting at Salford on 15 March 2002 received a verbal report on the lobby of Parliament three days previously, and the draft minutes were circulated round the table.  Since then, several more MPs have written asking for their attendance or apologies to be noted, and a revised version of the minutes is now attached for the record.  Health Minister Hazel Blears, addressing Social Services North West’s conference on 26 April, welcomed the opportunity to speak to 'an excellent organisation which gave people the opportunity to discuss ideas and share good practice.”  Later she paid tribute to our work in informing North West MPs of the financial plight faced by social services authorities in the region.  Referring particularly to the meeting in Westminster in March, she said “You really did make a big impact". 

3.2.            In April, the Chancellor Gordon Brown delivered the most substantial increase in Social Services for many years.  He announced a welcome cash boost of an extra £2.4 billion for social services spending over the three years from 2003, equivalent to an extra 6%.  The Chancellor’s added money looks set to be targeted particularly at helping the NHS tackle the problem of delayed discharges. 

3.4.      The extra money is said to be in response to the importance attached to investment in social services by the Wanless report (published on 17 April 2002) into the future funding of the NHS.  The report also recommended penalties for authorities which caused hospital “bed blocking” by failing to provide enough care support in the community.  Wanless goes on to say that due to demographic changes, especially the substantial increase in the numbers of the elderly, more pressure will inevitably be placed on social care than the NHS, resulting in a need to double social services budgets over the next twenty years.

3.5.            After an initial welcome for the extra investment, some caution has begun to be expressed about Government claims that there has been a generous increase in funding for social services.  Amongst issues which have been mentioned by relevant organisations are the following:

v     The money will not be used to improve pay and conditions for the social care workforce.

v     The amount is equivalent to just under 20 per cent increase over three years, whereas the Local Government Association has estimated that an increase of 30 per cent is called for. There is therefore a shortfall of £550 million.

v     The increase, which will not kick in until next year will only meet another expected shortfall, with any extra being wiped out by the cost of higher National Insurance contributions.

v     There is a concern that Ministers have “repackaged” figures on social care spending to give the impression of more generous new funding to ease delayed discharges form hospital, than is the case.

v      Council leaders have expressed concern that a 6% increase in social services budgets over three years would not be enough for councils to be enabled to care for more older people in the community.

Liz Railton chairperson of the ADSS resources committee has said that “a lot of the increases will drop into the existing hole we have already”. It is estimated that since the mid-nineties about £1billion annually has been siphoned out of other local authority budgets (mainly from environment and transport) or via council tax increases to bail social services departments out of severe overspends on the standard spending assessments.

3.6.            The proposal that councils be penalised for the cost of delayed discharges of older people from hospitals appears to undermine local councils’ initiatives to alleviate this situation and most significantly to prevent hospital admissions.  It could also create a radically different relationship between health and social services, despite councils’ strong track record in partnership working, a fact acknowledged by successive secretaries of State since 1998. Sir Jeremy Beecham, chairman of the LGA, described the threat of fines as “ both perverse and unhelpful”, leaving next to nothing for caring for a greater number of older people in the community. The government is clearly failing to take account of the problems faced by local councils, the sustained under funding of social services by central government and the severe shortage of care home places (a reduction of 25,000 places nationally in the past two years).

3.7.            The shortage of accommodation in care homes has itself undermined attempts to improve the position regarding delayed discharges. (It is claimed that only an increase of 10% in fees for the next two years would put the sector back on an even keel). Health Secretary Alan Milburn’s document on how the Government’s extra money would be spent envisages more care home places, along with an expansion of care home packages and intermediate care places, but it seems very unlikely that social services will be able to reverse the trend toward decline in care home places.  Extra money may allow local authorities to increase care home fees, but social services departments will still be at the mercy of independent care providers.  Commenting on the role of social care staff in the proposed NHS changes, Janice Robinson Director of the King’s Fund has said that if the government wants to build capacity in the social care market for older people waiting in hospital, it will have to tackle recruitment and retention across both health and social care.

3.8       The survey carried out by the LGA/ADSS and Treasurers Societies in January 2002 and reported to the committee at the previous SSNW meeting, showed that councils have been unable to contain pressures on their social care budgets during the past couple of years. The recruitment and retention of staff has also been hindered by the buoyant state of the economy and low levels of unemployment.  Private sector providers claim they are not being paid enough by local councils, which results in some of them leaving the market or selling their assets.  Social services departments are also losing funding: they will lose the promoting independence grant, thus impacting for instance on the development of intermediate care services.  New systems are also bringing in additional costs, for example the cost of financial assessments under the fairer access to care arrangements.  In the same week that the budget was announced the ADSS released a further survey showing that nearly all directors were convinced that a lack of resources had hindered the implementation of the Carers and Disabled Children Act 2002.

3.8.      As reported to and discussed at the previous SSNW committee, the growing number of children coming into care has also severely squeezed social services finances, accounting for 69% of the projected overspend nationally.  It will be a matter of continuing concern to members that there has been no mention by the Government of the pressing needs of children’s services

3.9.      Officials at the Department of Health  are drawing up proposals on how to penalise authorities that are not able to find care home places or fail to provide care at home for elderly clients ready to be discharged from hospital.  Local authorities will be consulted and the regulations are not expected to come into force until the summer of 2003 at the earliest, but the costs of penalties for local authorities could be huge.

3.10     Also at the previous SSNW Committee meeting Councillor Joynes raised the serious problem of implementing the fairer charging guidance for social services non-residential services.  She said that in some of our poorer communities, many recipients have to have their charges reduced or withdrawn, whilst there are not enough clients with sufficient resources to pay increased fees to absorb the shortfall incurred.  As a result the LGA has been approached to discover what action they are taking to pursue this.  They have made representations to to the DoH, pointing out the need for extra resources and clearer definitions in the guidance.  A meeting will take place shortly between representatives of the two organisations, and members will be updated about further developments at the meeting.

4.            Conclusion

4.1.            This report has described both the substantial and welcome increase in funding for social services announced in the Budget, and some of the shortfalls and questions still remaining.  The results of the latest Comprehensive Spending Review will be announced this summer, and one of the reviews that is feeding into the announcement for further spending plans covers children at risk. There is reason to be cautiously optimistic that this will bring in some extra money.  Overall however, concerns remain that continued vigilance and advocacy will be necessary to ensure that adequate levels of funding are secured to meet the needs of those requiring support from social services.

5.            Recommendations

5.1       Members are asked to note the above report, and the minutes of the meeting with MPs at Westminster on 12 March 2002

5.2.      Members are asked to consider what further action they may wish to take regarding the continued financial problems outlined above.