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The costs of care

Source: Public Sector Executive Oct/Nov 2014

Many councils are worried about the costs of implementing the Care Act, especially in London where costs are even higher and there are unique demographic challenges. PSE spoke to Hillingdon council leader Cllr Ray Puddifoot, London Councils’ executive member for adult social care.

The Care Act was notable for its relatively easy journey through Parliament, with cross-party backing, the willingness with which the government accepted amendments, and how quickly it became law.

Both the Local Government Association (LGA) and London Councils are supportive of the reforms under the Act (some of which are listed in the box-out), but both have concerns about a shortfall in proposed government funding for councils to actually deliver those reforms.

The LGA said that of 152 councils it surveyed, 134 are concerned about the implementation cost.

London Councils is also specifically concerned about the timescale of the implementation in the capital, which has many unique challenges, such as the relatively high cost of care and its demographics.

Funding gap

Cllr Ray Puddifoot, who has led the London Borough of Hillingdon since 2000, is London Councils’ executive member for adult social care.

He told PSE that while the measures in the Care Act are sensible, good for residents and have cross-party backing among London’s local authorities, “the difficulty, as always, comes down to funding and timing”.

London Councils’ own research has estimated that implementing the Care Act’s provision will cost the boroughs about £90m – which is £36m more than the government’s apparent funding offer of £54m, and lower than the Department of Health’s earlier provisional London allocation of £73m (which included £29m from the Better Care Fund).

The Care Act could increase the number of people eligible for council support by 27% in the capital.

Cllr Puddifoot said that although London’s councillors appreciate the scale of the deficit and the state of the public finances, “we’re asking for a conversation with the government about the pace at which we deliver the changes, because there will be training needs and all sorts of things”.

‘Councils are already stretched’

He wanted the government to do more to try to meet the costs of implementation, considering how stretched councils already are, having taken average reductions in funding of 35% since 2010.

“We don’t come into this in an awfully strong financial position. But we want to work with the government on this – we think the Care Act is a very good idea; it will give people more certainty about the future costs of their care. But we do have concerns about huge responsibilities dropped on us without adequate resourcing.”

London has “unique challenges”, Cllr Puddifoot said. “There was always an expectation that there would be a funding gap, because we are seeing such funding gaps in many areas of council services. But London has some unique challenges.”

That meant a ‘national approach’ was not necessarily the right one, he said, pointing out that higher care costs in London means the average care user will hit the £72,000 cap in three to four years, whereas in other regions the figure would be six years.

“There’s also a shortage of trained staff in London, and wages are higher than elsewhere, for the people to administer this. We’ve probably got the most diverse population in the country – that will have cost implications, for delivering information and advice to different groups.”

We asked Cllr Puddifoot whether having a single national cap was the right approach, considering the different challenges in different places, and he said: “It’s a separate argument, but there is a good case that there should be a different cap.”

He doubted the government would listen to that argument though, because it would increase the costs and complexity of administering the new system centrally, and introduce new problems if people move between local authority areas.

Timing and implementation

Cllr Puddifoot said: “To reiterate, we’re very positive about what they’re doing, but it is a huge ask to get this done in the timescale and for that money.

“We’re not crying wolf here, we think our figures are fairly reasonable. To be fair, the government does appear to be listening to our concerns, it’s just whether it will be in a position, because of the national economy, to address them. That brings us back to the timing point: should we introduce all of this in one go, or is it possible to do it in tranches?

“We’ve got to deliver early assessment, carers’ support, carers’ assessments – that represents a big cost pressure for councils in 2015-16, on top of cost pressures on other services too.”

Assessment costs

The LGA has said that delaying the implementation is not a reasonable solution – the only option is more funding.

A spokesman said: “A major concern for councils is uncertainty over the number of people in local areas who are paying for their own care who could now request an assessment under the new system to limit the care costs they have to meet.

“Without proper funding, councils may not be able to meet this additional demand for assessments placing a further strain on local budgets.

“Local authorities are warning the government that if further analysis being carried out between local government and the Department of Health in the coming weeks does uncover a funding gap, more money will be the only reasonable solution to carrying out these reforms – not delaying or making fewer changes.”

The results of that modelling exercise were expected due to be released very soon, as PSE went to press.

The LGA said its own analysis suggests that by 2020, councils will be spending about 40% of their total budgets on services for older and vulnerable people, with costs rising 13% faster than for any other services.

‘The clock is ticking’

Cllr Katie Hall, chair of the LGA’s Community Wellbeing Board, said councils want to help “as many people as possible” but that “the clock is ticking for government to get the funding right, so that these vital reforms do not face collapse before they have even begun”.

The reforms to care and support come into effect from April 2015, and the funding reforms from April 2016.

Cllr Hall said: “The Care Act has the potential to bring about a once-in-a-lifetime opportunity to improve the lives of the most vulnerable people who rely on care and support. Some of the most vulnerable people who rely on care, their families and carers are expecting changes from April next year.

“Many of these people will have been anticipating the positive impact that some of these changes could have on their lives and now could be facing the very real possibility that the government could have unfairly raised their expectations through a failure to properly fund the changes they have been waiting for.

“We have recognised the importance of these reforms since before the Care Bill was first introduced. It would be an absolute tragedy if insufficient funding jeopardised these desperately needed changes. In recent years, local government has worked tirelessly to save billions while protecting services for those who need them most, but we already know that the next two years will be make or break for adult social care.

“This additional pressure for adult social care is coming to councils at a time when local authority budgets are already under extreme pressure.

“So far, local authorities have managed to limit the impact on the essential care services that people rely on, but it is inevitable that services will eventually start to suffer in the face of such relentless cuts.”

A Department of Health spokesperson said: “We will meet all new burdens that arise from the Care Act. We will continue to work with councils to model the costs of our reforms for 2015-16 and will confirm final allocations to local authorities in December.”

Cllr Puddifoot noted that once the initial implementation is done, the Care Act will in the long term help cut costs while improving services for residents. 

“Once we’ve got this up and running, it will be good for residents, and even better for the councils,” he told us.

Key reforms under the Care Act

  • A new ‘wellbeing principle’;
  • A minimum eligibility threshold for care;
  • A duty to consider the physical, mental and emotional wellbeing of the individual needing care;
  • A new duty to provide preventative services to maintain people’s health;
  • Implementation of many of the reforms in the light of the Mid Staffordshire hospital scandal and subsequent reports;
  • Wider roll-out of personal budgets;
  • A care cap of £72,000;
  • Means-testing kicks in at an earlier level, meaning 35,000 more older people will get help with their care costs from April 2016, and up to 100,000 more by 2024-25;
  • A deferred payment scheme to prevent people needing to sell their home during their lifetime;
  • Provider profiles;
  • Stronger regulatory powers, including prosecution where necessary.

Tell us what you think – have your say below or email us directly at [email protected]


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