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‘OBR for public spending’ needed to improve finance planning in struggling sectors

A report published today by the Institute for Government (IfG) and the Chartered Institute of Public Finance and Accountancy (CIPFA) looking into the pressures being placed on public services has concluded that adult social care is being pushed to “breaking point” – and recommended the creation of an independent body to scrutinise spending and drive efficiency in the public sector.

The independent body, which would act as an “Office for Budget Responsibility (OBR) for public spending”, would ease pressure by scrutinising government tax and benefit spending forecasts and prevent “wishful thinking” from unrealistic budgets being set in Whitehall.

The findings analysed government data to examine the UK’s key public services including social care, and found that, despite growing demand that has seen the number of people aged over 65 in England jump by 16% since 2009, adult social care funding had actually dropped by 6% since 2009-10. There has also been a 70% reduction in people receiving “meals on wheels”.

It also warned of the difficulties local councils are facing trying to stretch budgets to meet social care needs.

“The money for adult social care comes from one of the most squeezed departments in Whitehall: the DCLG. Its budget for local government has been cut by 60% since 2011-12, and is set to fall to £3.3bn by 2020, an 88% reduction over nine years,” the report explained.

“Within this challenging context, local authorities have shielded adult social care from the worst of the cuts, but spending in this area still fell by almost 10% up to 2014-15, rising last year due to the Better Care Fund.”

The report alluded to a King’s Fund report that also pointed to the problem arising from the disparity in funding between different authorities, as social care funding fell by at least 20% in 25 local authorities but actually rose in a separate 36 authorities.

IfG and CIPFA also argued that community care had seen the largest decline in funding, leading to budgets being squeezed for long-term support and specialist care equipment, such as stair lifts.

Julian McCrae, IfG deputy editor, said: “As we’ve seen with prisons, social care and now potentially hospitals, the government risks getting into a cycle of crisis, cash, repeat.

“This report is not a call for more money. It is a call for better financial planning and reforms that are robust enough to survive public scrutiny.

“It is fundamental to increasing the effectiveness of these public services that ministers, officials and the public know how well government is performing, and use this information to guide decisions.”

Rob Whiteman, CIPFA chief executive, added that those working to deliver public sector services are up against stretched resources, meaning it is crucial “that we make the best possible use of the funds available”.

“This means having a thorough understanding of how organisations are run and services are provided, using this information to think strategically and creatively about improving policy decision making, which will ultimately improve service delivery,” he concluded.

In the upcoming Spring Budget, due on 8 March, the government must clearly show it addressing areas where it has already been forced into emergency action, the report said – such as prisons and social care. For the latter, the sector needs “a clear direction of travel, following the postponement of the Dilnot Review implementation and the slow pace of genuine health and social care integration”.

Whitehall must also consider how it can embed efficiency within public sector decision-making, such as by instructing the Treasury to develop and publish its own Performance Tracker. The key assumptions underpinning spending decisions should be made public and available for scrutiny, and these assumptions should then be subjected to independent review through an “OBR for public spending” so that their realism can be assessed.

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Theimprover   01/03/2017 at 18:55

I am disgusted at the tone of this article: the root of the problem is MASSIVE overspending by Labour creating the illusion that this is sustainable. We have long had one of the highest budget deficits and one of the highest current accounts in the world. We've been living in a phoney affluence for a long time. The SERIOUS AND IMPORTANT work of the OBR is to get us back to a sustainable position: comparing this with the wish to featherbed public sector bureaucracies is a disgrace beyond all reason.

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