Social care council tax precept: the beginnings of an opportunity?

The distribution of revenue raised for each council per head by the social care precept (Source: Richard Humphries at the King’s Fund)

First, some facts on where we are with local government and social care spending:

• Local government saw a 37% real-terms cut in government funding between 2010/11 and 2015/16 (NAO (pdf), executive summary)
• Adult social care expenditure fell by 8.7% in real terms between 2010/11 and 2014/15 (NAO (pdf), para 1.15)
• There has been a corresponding fall in social care activity in all areas of social care: homecare, day care, nursing care and residential care (between 2008/09 and 2013/14 – when data is available) (NAO (pdf), figure 4)
• Net local government spending per person (excluding public health, education, police and fire services) has been reduced by 23.4% between 2009/10 to 2014/15 (IFS (pdf), table 2.1)

Second, the effects of the social care precept. (Recall that the council tax precept for social care was introduced in the 2015 Spending Review, and is the ability of local government to raise council tax by up to 2%, as long as it is spent on social care.)

• LGA analysis suggests the council tax precept for social care would raise £400million in 2016/17, but only if all 152 local authorities used the precept in full
• The average Band D taxpayer would see an average rise of £24 in their council tax bill if the precept were used in full in 2016/17 (LGA)
• (The LGA has previously estimated that the social care funding gap would grow by at least £700 million in 2016/17. The introduction of the National Living Wage will cost councils at least £340 million in 2016/17 on top of this gap)
• Though the Treasury thinks the social care precept will raise £2billion by 2019/20, the King’s Fund notes the precept will (a) widen the gap in provision between richer and poorer areas, and (b) raise at most only £800m a year.

It’s hardly grounds for optimism is it?

And yet, I find myself wondering if there are reasons for hope in the social care precept? I suggest this for two reasons:

1. By saying that social care costs can be met by a centrally-enabled (general) tax, it feels to me that the government has set a precedent for funding social care through general taxation. This has not been an option government has realistically considered before, though there are plenty of ways general taxes can be levied and used (see, for example, pp.31-37 of the final report of the Barker Commission (pdf))
2. People will notice if their council tax bills rise. They’ll probably not appreciate it, and will want to know why their bills have gone up by an average of £24 for social care alone. We know that the general public has very little awareness of how social care is funded (see Chapter 2 of Ipsos Mori’s research for the Dilnot Commission (pdf)), so this therefore represents a communications opportunity that could begin to put social care (and how it is funded) on a par with the NHS in terms of public awareness.

It’s not much to go on, but the ability to make the case for adequate and sustainable funding for social care needs all the help it can get. The social care precept itself is neither adequate nor sustainable; but it might be the beginnings of an opportunity.

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Highlights from CQC’s State of Care Technical Annex and King’s Fund’s money-fest!

A Technical Annex (pdf) to go with CQC’s State of Care 2012/13 report, you say? How could I possibly resist?!

Below are some highlights from the annex looking specifically at the funding of adult social care. (These figures will be familiar to folks who pore over the HSCIC releases every quarter, but I take the view you can never get enough of info like this.)

Total and type of spend on adult social care:

• Spend on adult social care has risen in cash terms – from £16.8bn in 2009/10 to £17.2bn in 2012/13, but there has been a real terms decline. Adults under 65 with a learning disability where the only major user group to see a real terms rise in expenditure from 2009/10 to 2011/12.
• The following proportions were spent on the following client groups in 2011/12(figures include Supporting People monies, which was presumably found down the back of the sofa in the last year or so
• 53% of spend was on older people
• 31% on adults under 65 with learning disabilities
• 9% on adults under 65 with physical/sensory impairments
• 7% on adults under 65 with mental health problems

Direct Payments expenditure:

• Expenditure on direct payments for adults increased in both cash and real terms. £360m was spend on Direct Payments in 2006/07 and reached £1.1bn in 2011/12
• This is a real terms increase of 175% and is 6% of all gross adult social care spend.

Unit costs of different types of social care are fascinating. Really.

• The average cost per adult supported in residential care, nursing care or intensively in their own home was £608 per person per week in 2011/12 – a 5% real terms cut
• The average cost of providing day care for adults (including older people) was £213 per person per week
• The cost of home care per person per week for all adults was £206.

Top-ups

• This one surprised me: the overall proportion of people who indicated that they (or their family) ‘top up’ their care has increased from 38.1% in 2010/11 to 38.8% in 2012/13. This probably isn’t as much as I thought it would be.

To summarise, there’s less money in real terms, no matter what anyone else tells you.

For those folks who want extra geek points – and, frankly, who doesn’t? – it’s well worth reading CQC’s technical funding annex in conjunction with the King’s Fund’s submission (pdf) to the Health Select Committee’s Inquiry into public expenditure on health on social care. In social care, it notes:

The number of older people receiving publicly funded services has fallen by 26 per cent since 2009/10, with an equivalent reduction of 21 per cent among working age adults over the same period. Given the overriding imperative to provide care closer to home and reduce the need for residential care and hospital admissions, it is particularly worrying that the largest reduction has been in the use of community-based services such as home care (down 25 per cent) compared to nursing home care (down 4 per cent) and residential care (down 1.7 per cent).

Their numbers on the NHS are just as frightening.

So, to summarise again:

• There’s less money in adult social care
• There are less people getting adult social care
• The number of people getting fewer services is rising quicker than the rate at which money is being taken out of the social care system
• Money is being cut from services which cost less and people prefer quicker than it is being cut from services which cost more and people prefer less
• The NHS is fairly buggered, or at least faces the biggest financial challenge it has ever faced.

What could possibly go wrong?

Establishing social enterprises in health: learning the lessons for DPULOs

I blogged recently on the King’s Fund’s recent interesting report on “Social Enterprise in Health Care”. (What can I say: I’m not the sort of person you want to get trapped in the kitchen with at a party.)

In that post, I highlighted that the King’s Fund wants to create conditions in which social enterprises can flourish and grow, and said that this would also have a beneficial impact for Disabled People’s User-Led Organisations (DPULOs).

I thought it would be useful, then, to highlight some of the other points that the report highlighted more widely, since many of these are relevant to DPULOs as well – either specifically within health or more generally across the various parts of the public sector DPULOs can work in.

External factors

The regulatory environment and access to finance act as barriers to the growth of social enterprises. The Social Enterprise Investment Fund (SEIF) partly addressed these barriers by providing £8.3 million to ‘Right to Request’ applicants. (The Strengthening DPULOs Programme, through its Facilitation Fund, acts in a similar way.). The support offered through the SEIF, though, was under pressure since there were more requests to it than it could meet. Other financial barriers that can be addressed can be indirect barriers: for example, removing taxation constraints.

Furthermore, understanding and addressing barriers can be and is being done in non-financial ways. For example, the Cabinet Office provides an information line and web service for social enterprises. Similarly, they have set up a mutuals taskforce to reduce some of the red tape social enteprises face, and have established “pathfinder mutuals” – organisations which are becoming mutuals and receive support, and via which learning about and solutions to problems they face will be highlighted.

Wanting to become a social enterprise is sometimes the “least worst” option, often motivated by being led by the ‘right’ sort of people instead of being taken over or merging with the ‘wrong’ sort. Other motivations for wanting to become a social enterprise include wanting to be more autonomous, to speed up decision making and to reduce bureaucracy.

Internal factors

Structural changes to organisations that happen from the top down – for example changing structures or governance documents – are not as effective as creating employee-led (and possibly by extension, user-led) initiatives. Engagement should be driven from the bottom up and be a permanent feature of the organisation’s culture and structure.

This said, supportive legal and financial frameworks were an essential ingredient in building the platform for engagement. Similarly, dedicated business support that offers advice and input specific to learning and development around social enterprises (and thus user-led organisations) is most beneficial.

Big beasts versus social enterprises in health

The King’s Fund had a very interesting report out last week: Social Enterprise in Health Care.

Focusing on the health sector, the report explores the reasons why some social enterprises became social enterprises in the first place, and whether what they were hoping to achieve has happened in practice.

I think this is of interest because Disabled People’s User-Led Organisations operate in the same “space” as social enterprises.

Beyond the specifics of the challenges facing establishing social enterprises, there is a wider context. As the report’s author, Rachel Addicott, highlights in her summary post on the report, there is something of a paradox at the heart of the health reforms when it comes to social enterprises.

On the one hand, there is a desire for the NHS to become the largest social enterprise sector in the world.

On the other, there is the “any qualified provider” drive towards greater competition. Thus:

The question is whether these emergent organisations can really compete with the likes of private companies and large voluntary sector providers.

Of course, the issues that face emerging social enterprises are similar to those that face smaller voluntary sector providers, including disabled people’s user-led organisations – a virtually unheard of provider in the health sector.

But even here there is something of a hierarchy. As Addicott notes:

Many social enterprises have emerged from primary care trust (PCT) provider arms – some taking the entire provider service with them, and others breaking away into smaller enterprises that deliver distinct types of care.

As such, even these spin-out social enterprises have a head-start over smaller voluntary sector organisations, since they’ll have the contacts and the familiarity with health commissioning – issues of process – to compete when bidding for contracts – an issue of content.

The King’s Fund rightly, in my view, calls for creating conditions in which social enterprises can grow and flourish, and so contribute to a

future market containing a plurality of differently-sized, locally-based social enterprises growing and competing.

Creating such conditions would also have a beneficial impact on DPULOs, too.

The King’s Fund suggests that such conditions can be crated through both political commitment to a practical support programme and a commissioning strategy to nurture the development of the social enterprise model.

Such practical support was made available under the previous Right to Request programme (on which more here), and covered areas such as HR, finance, governance structures. It also made mentors widely available for other organisations – mentors being organisations already successfully operating as social enterprises and providers in the health sector.

Having something similar to the support programme for the Right to Request for emerging social enterprises in the current health reforms would be of great use. Making this support available for smaller voluntary sector providers as well would be a generous, and beneficial, extension of the support.