Like all council chief executives, Barry Quirk spends a lot of time these days doing his sums. One thing he has worked out is that just 8,000 people in his south London borough’s population of 290,000 are taking up half his budget.
The 8,000 –2,000 children and young people over the course of a year and 6,000 older and disabled adults – are users of social care services in Quirk’s borough of Lewisham. He thinks the picture will be similar, or even more pronounced, elsewhere: as council funds shrink under relentless hacking back of central government grant, social care is accounting for an ever greater share of overall spending.
“If you get social care management wrong, then it has a very big impact on the rest of the organisation because it’s such a high proportion of the budget,” says Quirk. “And that’s something that wouldn’t be recognised in much of the rest of the world, because social care isn’t a feature of local government in many other countries.”
Depending how you do the counting, adult social care and children’s care services account for between 47% and 56% of Lewisham’s net annual budget of some £270m. In shire counties, adult social care alone can account for 40% of the budget.
Such stark figures make it imperative that every social care pound is spent to maximum effect. They make it essential also to try to prevent people needing services in the first place: keeping a family together, rather than having to take the children into care, or keeping older people living independently, rather than paying for them to go into residential care, has never been more important.
According to the Local Government Association (LGA), which represents English councils, spending on prevention has been protected amid the butchery of services over the past four years. In adult social care, preventive schemes costing £900m a year remain intact even though councils have had to absorb rising demand and make cuts in care services to the total tune of £3.5bn.
With four more years of austerity in prospect, though, is this sustainable? There are growing concerns about the affordability of the Care Act reforms, placing many more duties on councils over the next 18 months.
Quirk thinks that one answer would be for councils to share social care responsibilities, both as a means of achieving economies of scale and of retaining expertise in commissioning specialist services. Taking adult and children’s services together, he points out, the market is worth more than £22bn and most of it is outsourced to the private or voluntary sectors.
“It could be that grouping makes sense, especially when you think of how very specialist some services are becoming, such as commissioning for dementia care,” says Quirk. “Authorities are looking at this now, rather than believing they can solve all their problems locally.”
The Audit Commission spending watchdog has arrived at the same conclusion. Having researched the cost of children in care, or being “looked after”, it calculates that councils in England spent a total £3.4bn on them in 2012-13, up 69% on 2000-01. But some councils spent more than £60,000 on each child, while others spent less than £40,000, and if the highest-spending 25% could bring their figures down to the level of comparator authorities, then a total saving of £84m could be realised.
Almost two-thirds of all care by volume for looked-after children is foster care. What influences the cost of this, the commission says, seems to be the ease of recruiting foster carers, the use of foster care agencies and the amount of care commissioned. Councils that purchase more care, and have a wider range of suppliers to choose from, tend to get a better price.
“Councils should use their collective purchasing power to get maximum value for the £1.5bn they spend on foster care,” says Jeremy Newman, the Audit Commission’s chairman. “Rather than competing with each other, potentially driving up prices, councils should consider whether collaborating with neighbouring councils can secure the services they need at a price they can better afford.”
While prevention and making better use of existing funds will both be crucial over the further years of austerity, social investment offers a glint of promise of fresh finance. In a new report commissioned by charity Age UK and funder Big Society Capital, consultancy London Economics says government could tap new sources of cash for adult social care if it launched a payment-by-results innovation fund to attract big investors.
Caroline Abrahams, charity director at Age UK, which is itself hoping to use social impact bonds to develop and spread its preventive work in Cornwall (see page 5), says: “Social finance isn’t a magic bullet but we believe it has a significant role to play in strengthening social care in this country, particularly by supporting innovation and by helping to bring good ideas to scale.”
There was an estimated total £20m of social investment in social care in 2011-12. The report envisages bringing in £40m a year in each of the next five years. But welcome as that £200m would be, it would do little to cushion the blow of a £4.3bn sector shortfall.
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