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DH told to review impact of National Living Wage on social care by November

Funding cuts and wage pressures will make it harder for local authorities to fulfil their Care Act obligations, and maximise the benefits of personal budgets, an influential committee of MPs has stated.

In a new report, the Public Accounts Committee (PAC) said that taking risks with personal care budgets is increasingly challenging because of funding cuts, and there must be greater clarity on how councils implement them.

Local authorities reported that the number of community care users receiving personal care budgets varied from 10% to 100%, despite the Care Act 2014 requiring all users to have personal budgets.

The committee has called for the Department of Health (DH) to improve its knowledge and understanding of the impact of funding reductions on the adult social care sector, and it should review the impact of the National Living Wage by November 2016.

At the same time, the department must report on the results of its review of the Care Act, including the current requirement on local authorities to review users’ care arrangements annually.

The report said that spending of personal care budgets was further threatened by the lack of a sustainable care market, with many providers warning they would have to stop operating because of decreasing fees from local government and the cost of bringing in the National Living Wage.

It also warned that the personal care budget system was confusing. Budgets overlap with personal independence payments and disability living allowances and cannot be integrated with personal health budgets because healthcare is free whereas social care is means-tested.

Meg Hillier MP, Chair of the PAC, said: “The need for adult social care is increasing but in recent years the amount spent on such care by English local authorities has fallen in real terms.

“Against this backdrop there are clearly risks in pursuing new approaches to providing care. Personal budgets have great potential but the interests of users are paramount and must be protected.”

The PAC said that local authorities have different measures of what constitutes a personal care budget, meaning that in areas with a high rate of success, not all users were receiving “genuinely personalised” funding.

The report said that although personalising care should allow patients to try “new, different and, therefore, potentially risky” care, local authorities were failing to do this.

Some vulnerable groups, such as older people and people with learning disabilities, were not receiving support to access new models of care, and this was likely to get worse as a result of spending cuts.

Local authority spending on adult social care fell by 7% in real terms in 2010-15. The Department of Health said that local authorities would be able to access additional funding through the precept on council tax and the Better Care fund, but the report called this “a complacent response”.

The Nuffield Trust, Health Foundation and the King’s Fund estimate that the social care funding gap will be between £2bn and £2.7bn by 2020, and the LGA warns it could be as high as £4.3bn.

Cllr Izzi Seccombe, community wellbeing spokesperson for the LGA, said: “Despite the financial pressures faced by local authorities, councils and their partners aspire to see that people's needs and wishes remain central to their care.

“Satisfaction with care and support remains high, and councils continue to learn from each other about how to deliver innovative and personalised services. But to really ensure that individuals receive the care they need and deserve, we need social care to be properly funded by government.”

She said the government should bring forward funding in the Better Care Fund from the end of the decade, which it has consistently refused to do.

The PAC said that the DH should respond to the report by setting out how it is going to ensure that all receivers of personal care budgets receive genuinely personalised care.

It also said the department needed to improve its knowledge of the take-up of personal care budgets and how they are affected by cuts.

A DH spokesperson said the Care Act had “put personalisation at the heart of care”, adding: “We are giving local authorities more money for social care - up to £3.5bn by 2019-20 – and working across government to make sure care providers have strong contingency plans in the current challenging market.”

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