What risks face local authorities planning to cut their adult social care budgets?
In a new report titled The State of Local Government Finance in England 2024, the Local Government Information Unit (LGIU) has revealed that 51% of senior council figures warn their councils are likely to declare effective bankruptcy in the next parliament unless local government funding is reformed, with a further 9% saying they are likely to go bankrupt in the next financial year. Just 4% of council respondents had confidence in the sustainability of local government finance, while only 6% are happy with the Government’s performance on understanding the scale of the problem facing council finances.
Nine out of 10 respondents said their councils are raising council tax, and the same proportion are increasing fees and charges. At the same time, two thirds of councils are cutting spending on services, meaning that services are getting more expensive for most residents at the same that they are being cut. For councils with responsibility for social care, the survey found that adults and children’s social care together make up the most serious long-term pressure, with 52% of council respondents saying adult social care was the greatest long-term pressure and 16.2% of councils planning on cutting adult social care.
According to the report, high inflation, alongside rising need for council services, has compounded the impact of central Government funding cuts. Even for councils that manage to balance the books, there are concerns that some services they provide may fall below legal standards, which will continue unabated without costly legal challenges.
Respondents to the survey called for a reform of social care, saying the reserves they are using to survive will soon deplete, while others called for more investment in preventative activities ‘which would reduce the pressure on our services – particularly regarding adult social care and children, in the medium to long term’.
The report declares it ‘unsurprising’ that the greatest long-term pressure is split between adult social care and children’s services, when ‘the proportion of upper tier budgets which go on these services are considered’. One respondent said, ‘Four percent of the population use social care, which is 70% of our budget – and you wonder why residents are not happy the place doesn’t look spotless and potholes need to be filled. Residents are not happy their council tax goes on so few. Social care needs reform.’
Jonathan Carr-West, Chief Executive of the LGIU, said, ‘We have long warned that a lack of funding combined with inflation and rising need for adult and children’s social care, homelessness, and SEND services has pushed councils to the brink.
‘This year’s State of Local Government Finance report reveals the desperate, ruinous financial situation councils find themselves in. Cutting services, borrowing more money and spending reserves year after year is completely unsustainable. Citizens are being failed.
‘With over half of councils warning us they are at risk of bankruptcy within the next parliament, it is no longer possible to blame individual governance issues. There clearly is a systemic issue and rather than bunging local government panicked injections of cash, whoever wins the next election will need to reform the entire system, bringing back
multi-year settlements based on an area’s need and developing new ways of revenue raising.’
Providers of adult social care services have been expected to do more with less for years now and so it is no surprise that councils are continuing to slash budgets. Providers remain sitting in the eye of a perfect storm with escalating staff costs, energy bills and mortgage rates adding pressure to their operations. Although the initial shock of the cost-of-living crisis has eased, providers are reflecting carefully on how they spend money and reinvest it back into their own businesses. Councils need to understand that failure to pay appropriate fees means that providers may not be able to cover the costs of day-to-day essentials (for example, expensive electronic care systems, advanced training or activities). This will inevitably result in some providers trying to cut corners – not out of choice but necessity. Is that really the best way to provide care to vulnerable people? Local authorities need to realise they have a duty of care to the people they place into care services and that placements they commission should be properly funded. To fail to do so increases risk. Ironically, the reduction or stagnation of fees could ultimately result in an increase in local authority quality monitoring and safeguarding activity if providers are forced to work to reduced budgets. This would not only be a false economy and more costly from an expenditure perspective but – more importantly – will have an adverse impact on service users (not to mention the public’s view of local authorities more generally). A further risk to local authorities is the increased scrutiny by the CQC. The regulator is now obliged to review how councils discharge their duty in line with the Care Act 2014 and, in my opinion, this should absolutely include how services are funded and how a local authority’s refusal to pay an appropriate fee impacts on vulnerable people. Jenny Wilde, Partner, Acuity Law. X: @AcuityLaw Email: [email protected] The scale of collapse in the care sector is unparalleled. Unmet need, care withdrawal, underinvestment, disinvestment, commissioning backlog and unimaginable hardship witnessed begs many questions for local authorities. Councils are caught between Care Act responsibilities, ambitions, people needing support and dependency on central Government. Councils have strict obligations under the Care Act 2014 and face increasing demand. Guidance was designed to promote wellbeing, assess and meet people’s needs, achieve the outcomes most important to them, help them retain or regain skills and confidence and prevent increased need or delay deterioration. In 2023, there were 30,090 fewer people receiving long-term care, a fall of 4.6%, yet requests for support grew by 10.6%, reflecting a long-term trend of rationing adult social care. Simon Bottery, Senior Fellow, Social Care at The Kings Fund, suggested that social care has got worse since Government pledged to ‘fix’ it in 2019. He outlined eight key problems, which are now worse: Geoffrey Cox, Managing Director, Southern Healthcare (Wessex) Ltd. Email: [email protected] What is your experience of working with your local authority? Leave a comment on this article or join the conversation to share your thoughts.