Osborne's 'big' Spending Review does little for social care

The Chancellor, describing his 'big Spending Review', announced the Government will increase the Better Care Fund (BCF) by 1.9 per cent, giving local authorities access to an extra £1.5bn by 2020.

The BCF has a local, single, pooled budget to incentivise the NHS and local government to work closely together to meet the health and social care needs of individuals.

However, the Spending Review has sparked fears that more care homes will shut because the Chancellor has failed to help plug an almost £3bn shortfall in adult social care budgets forecast by 2020.

Extra two per cent council tax rise for social care

As reported by carehome.co.uk earlier this week, the Chancellor confirmed local authorities can charge an extra two per cent in council tax bills for social care, which will enable local authorities to raise £2bn for social care.

George Osborne wielded his axe with a £4.1bn funding cut over this Spending Review period for local government, which comes on top of almost £10bn in cost pressures facing councils by the end of the decade.

The Chancellor said councils would be able to spend 100 per cent of the receipts from assets sold.

Nurses

Grants for student nurses will be ditched and replaced by loans.

A cap on training places for nurses will be scrapped and there will be 10,000 new training places.

Mental Health

Osborne announced £600m extra for mental health services.

Housing

Under housing plans, the Government will also give £400m to help build 8,000 specialist homes for older people or those with disabilities.

NHS

The NHS budget is currently £101bn and will increase to £120bn by 2020-21. Prior to the Spending Review, the Treasury said front line NHS services in England will get a £3.8bn, above-inflation, cash boost next year.

Care England’s chief executive Martin Green, said: “I would like to see George Osborne mirror the £3bn that he has given to the NHS, and to put this money directly into social care. It is important that George Osborne finds a way to get this money directly to care providers.

"We needed £3bn and we have got less than £0.5bn.

"Not every authority will raise the council tax by two per cent and even if they did, that only raises £0.5bn and the BCF has not been spent on independent care services, so this will not help at all.

Funding Tariff

“Local government has suffered significant cuts over the last five years. Perhaps [the Chancellor] should consider taking social care out of local control, setting an appropriate funding tariff for social care, and applying this across the system.

"This tariff needs to be about £1,400 a week [for every resident in a care home] which equates to just over £8.30 an hour."

Martin Green added: "As for asking councils to draw on their reserves, not every council will do that, and if they did, it would not necessarily go into social care. The problem with asking councils to do anything is that nobody monitors them. They are required by the Care Act to develop a “diverse and sustainable care market” and in many areas, the council's low level of funding is an impediment to this objective, but nobody calls them to account for it.

"The extra nursing places will not come through the system for at least three years, and will have been based on the needs for nurses in the NHS.

"The Chancellor did not reference the fact that there was a chronic nursing shortage in the independent sector when he made this announcement, he only referred to the NHS.

"This budget has not delivered the £3bn required to put social care in a stronger position."

Pension

The Chancellor also said the basic state pension will increase next year by £3.35 to £119.30 a week.

Local Government and its reserves

In his speech, George Osborne encouraged councils to use their reserves. Referring to the economy, he pledged to "fix the roof while the sun is shining."

Councillor Claire Kober, who is resources portfolio holder at the Local Government Association (LGA), said: "In many ways, managing a council's budget is no different to managing your own household budget in that it is always prudent to put money aside to fix the roof if it falls in.

Referring to local authorities' reserves, she said: "Most of this money is used to repair ageing council assets, build new roads and regenerate areas or pay for school places and superfast broadband.

"Ninety-three councils were forced to withdraw money from reserves in 2014/15 and 203 plan to do so in 2015/16, as funding cuts bite.

"Forcing councils to spend reserves on plugging funding gaps would be a reckless gamble with the future of people who rely on council services and would put local communities on the fast-track to financial failure.

"Such a move would leave councils with no funds to make vital investments or manage new financial risks and would also increase the national deficit."

Lord Porter, chairman of the LGA said: "It is wrong that the services our local communities rely on will face deeper cuts than the rest of the public sector yet again and for local taxpayers to be left to pick up the bill for new government policies without any additional funding.

"Today's announcement on council tax will go some way to allowing a number of councils to raise the money needed to offset some of the cost of social care.

"The £1.5 billion increase in the BCF announced today is good news, but it's vital that this is new money and must be spent on adult social care."

The combined Autumn Statement and Spending Review sets departmental spending limits for the next five years and give details of the government's taxation plans, it decides how £4 trillion of taxpayers' money will be spent. Government departments have been asked to find a total of £20bn in savings under plans to achieve a £10bn budget surplus by 2019-2020.

Michael Lingens, partner at law firm Charles Russell Speechlys said: “Good news that £400m has been allocated to building new social care homes, including for those with learning disabilities – which is quite a change for a Government usually looking for market-driven solutions."

'Woefully inadequate'

Dr Rhidian Hughes, chief executive of the Voluntary Organisations Disability Group said: “The social care funding settlement is woefully inadequate. The spending review offered Government a chance to put social care funding back on track financially yet this important opportunity has been lost.

"Government’s failure to invest in social care is a disgrace. 1.9m people require social care and at this time of unprecedented demand for services, coupled with financial austerity, fewer and fewer disabled people are eligible for support. This unmet need is now set to significantly increase.

"Government needs to be alert to the fact that social care markets could fold”.