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Pot Luck for Social Care….

29 October 2018

Austerity is over, and Britain expects a budget that reflects this…..

Well, so the papers tell us, although I suspect most people had a more measured set of expectation about what the Chancellor would be able reveal in his announcements today. The ongoing negotiations around Brexit almost certainly guarantee that in reality – deal or no deal – we will see some sort of new financial plan having to be enacted in the new financial year. The deal scenario might enable us to have a revised budget with a bit more bounce, and the no deal picture may involve a wide range of contingency measures to balance out economic shocks to the system….

However, what news has the budget brought and how will it impact on social care and those working within the sector?

There was a great deal of leaked news about this budget, and of course, the announcements earlier in the year in relation to NHS spend levels, meaning the elements of surprise were not in abundance. Over the weekend a story emerged in The Times and The Guardian about increased funding for social care, with a figure of between £800m to £1bn quoted.

Whilst it was good to see that this prediction partially came true, the final announcement of £650m for social care doesn’t go anywhere near the shortfall in social care funding recognised by a wide range of bodies including ADASS, LGA and the Care and Support Alliance (of which NCF are members). 

The fact this appears to be new money going directly to local authorities is positive. However, with credit to the Kings Fund for its detailed reading of the treasury papers, it appears although only £240m of the £650 is ring-fenced for adult social care, the rest to be spread across all social care – including children’s services.

This does, of course, mirror the short term cash injection of £240m ‘in year’ into social care, but this announcement made at the Conservative Party conference was very explicitly linked to discharge and again, bears no resemblance to the level of funding gap that currently exists in social care. 

There remains the long-term commitment to the social care green paper, which is intended to focus on long term funding solutions. However, the current grasp of both the level and immediacy of the shortfall does not provide much encouragement. It is imperative any green paper will need to accurately reflect the current requirements as a minimum baseline to go forward from there.

Of course, the government will want noted they have injected an additional £240m ‘in year’ into social care, but this announcement made at the Conservative Party conference was very explicitly linked to discharge and again, bears no resemblance to the level of funding gap that currently exists in social care.

There were a number of other elements of the budget that will have a significant impact on both the workforce and the people that care providers support.

There has been growing pressure on the Chancellor to put more resources into the roll out of Universal Credit. The commitments outlined today highlight the pressures this system is under, with specific money for transition, and in addition a further £1.7bn to Universal Credit payments. If the funding is targeted in the right way and the roll out of this massive change programme for the welfare state continues, it will provide much needed support for increasing numbers of the most vulnerable working age adults that are in receipt of care and support, alongside those working within the care sector and in receipt of essential benefits.

The budget also reinforced the anticipated rise in national living wage, up an additional 4.9% from £7.83 to £8.21 coming into effect in April 2019, alongside rises in both the personal allowance and the higher rate threshold.

In addition, the budget highlighted increased spending on mental health, heralding a £2bn investment in a ‘new mental health crisis service’. It is interesting to reflect on the window this offers into the complicated set of negotiations happening behind the scene in relation to the NHS 10 year plan. Reports have suggested this is an early indicator that mental health services will benefit disproportionately from the NHS 70 year birthday funding announcement.

We will have to wait until the 10 year plan to see exactly what this additional funding is due to do, and how much of it might benefit people in receipt of care via enhanced community services – for example.

The tax relief on small businesses, whilst having limited impact on social care providers, will potentially have a knock on impact on local authority finances. In 2020, local government funding makes the transition from central government grant funding to one based partly around local authority’s ability to raise revenue through business rates. The risks around this approach for social care were highlighted in an IFS report in March this year, and my blog at the time focussed in on these risks 

Whilst we may not have seen any rabbits pulled out of the Chancellor’s hat in today’s budget, we may just have seen another magic trick via some effective sleight of hand; as the chancellor gives to social care with one hand, whilst simultaneously removing future local authority revenue raising powers with the other.

So where does social care stand? It is worth taking a moment to consider the same budget that gave social care £650m, gave pothole funding £420m. It is clear this Chancellor has an eye for patching up the holes in all sorts of public services – although he must recognise this approach is expensive, repetitive and - like the holes in the road - subject to extreme winter pressure……

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