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Operating in Austerity

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Q. How should care providers respond to the funding and commissioning pressures of austerity?

A. Professor Rhidian Hughes, Chief Executive, Voluntary Organisations Disability Group

There are clearly challenges and barriers to social care funding and commissioning. Within the context of unremitting demographic change, demand is rising. This year, directors of adult social services in England plan on making very significant cuts. These equate to:

  • Physically disabled people and people with learning disabilities using residential and home care – £53m.
  • Older people supported through home care or in residential care – £67m.
  • People using mental health services – £14m.

By the end of the decade, the Local Government Association and Association of Directors of Adult Social Services estimate a £4.3bn funding gap in adult social care.

Against this backdrop, how should care providers respond to funding and commissioning pressures? Voluntary Organisations Disability Group (VODG) members recently discussed such challenges at a roundtable event held at the Group’s 2015 annual conference in London.

The debate was attended by senior directors and chief executives. The impact of austerity was acknowledged by all but it was clear that discussions had to be around more than cuts. As one participant said, social care needs more funding but ‘let’s just take it as read there is not enough money…demand is growing, people are living longer with more complex needs and resources are reducing – all of which is a fairly grim financial picture’.

The general consensus was that the difficult financial context should encourage providers to adopt a more proactive approach. ‘In the worst of times, it is the best environment to enable inspiration and innovation. So we can either continue to be in this place we’re in – and there are those in the wider sector who are at risk of going under in the next five to ten years – or we can think about that in a different way.’ This rings true for all providers, not just those in the third sector.


However, there are obvious barriers to this approach. ‘At the moment,’ one participant explained, ‘commissioners are finding it hard to be innovative and helpful or inspiring and they’re quite risk averse’. Several commentators agreed that it was often difficult to even secure a meeting with those who hold the local authority purse strings.

‘They [local authorities] cancel, they send us holding letters…I’m getting held at assistant director stage; until I can get above that to someone who can make a decision, we’re never going to turn the ship.’

The debate heard examples of lack of engagement from councils. This included meetings being frequently cancelled and local authority staff attending meetings ‘totally unprepared’. One participant added that, ‘they sent four senior staff to speak to us about the care funding calculator – we had to give them the password to use it’.

There was concern that commissioners favour large providers of generic adult social care services ‘who can provide everything they want’ over smaller, more specialist, local organisations. However, one commentator warned that commissioners who buy services from only one care provider will contravene the Care Act, which encourages choice from a variety of providers.

The roundtable heard that the result of such challenges arising from funding and commissioning pressures was an increase in risk; risk to quality for people needing care, and to the reputation of the providers delivering it.


There was agreement that much can be done to the way providers present themselves to and communicate with commissioners.

Given that, as one participant said, ‘the language that local authorities are being told to learn is health’, even something as simple as tweaking vocabulary can help. With reference to a meeting with health commissioners, one person said, ‘We may not be speaking the same language, we may not be presenting things in a way they [councils or health commissioners] understand…Let’s establish a need first off – for example, articulate people as “patients” rather than “customers” when dealing with the NHS.’

Another contributor explained the importance of adapting arguments for different stakeholders. ‘At a meeting with chief executives of local hospital trusts, I said “you’ve got an issue with bed blocking…when patients stay for a long time, you get bashed on key performance indicators, and this costs you money so I think I have a solution”.’ The same provider also insisted the trusts brought their clinical directors into meetings and ‘we spent time articulating how this [our services] would benefit them.’

Next, it was important to explain the benefits to the local clinical commissioning group. ‘We began pitching the same product, but pitched it as saving money on the continuing healthcare budget.’ Finally, ‘we went to the local authority…[persuading them of the service’s benefits] as part of the reablement agenda’. Four months later, after a series of persuasive and tailor-made discussions, ‘each found a niche they wanted for their own purpose’ and the provider won the contract.

One controversial area of discussion was how articulating the threat of a service closing can re-engage commissioners. They went on to explain how they informed local commissioners there was ‘approval from the board [to warn about a service closing] – this wasn’t just a negotiating stance’.

Another speaker said invoking the dispute resolution process, complete with legal advice, had made commissioners take the provider’s concerns seriously and force dialogue.

A third contributor recalled an experience with commissioners, ‘We gave notice; we were running at a loss. We had nothing to reinvent – if you go bust you put lives of service users at risk. We did give notice and they went to get someone else to pick up work [then] they came back to us asking “could you just tweak it a little bit”.’ The service was re-commissioned.

Participants agreed, however, that it was important to ‘come to the table with positivity and solutions’, rather than empty threats to use as a bargaining tool.

Discussion about solutions moved to changing how care providers are perceived by the public, policymakers and politicians. Health and Government bodies, said one speaker, seem to only see a homogeneous ‘social care’ or ‘voluntary sector’ (or as another put it, all about ‘corduroy and sandals’). But it is vital to convey that ‘we’ve all got decent business skills’. In terms of the sector’s image, ‘it’s about that respect for us as businesses and as a sector’.

One contributor suggested there is a need to change the stereotyped image of providers ‘to not just being caring, but being caring and commercial’. Another argued that positive case studies and examples of individuals in the media would help, ‘It’s like social work – you only ever hear about bad social workers’.

The sector could do with what one commentator described as ‘a savvy PR approach as to how we improve our image’. Others agreed, ‘The public doesn’t understand [disability]…they don’t approach it from a human rights perspective, but from a charitable perspective…we have to say people have human rights for proper services, it’s not from a charitable patronising perspective’.

Ultimately, as the debate heard, ‘it’s about the value of social care and how we get on the same footing as health’.

There were suggestions of more collaboration and sharing of information – on commissioning processes or about service contracts, for example – between individual providers. ‘No single organisation can solve this [the pressures on social care] as the future is so bleak.’ There was debate over the practicalities of sharing data, ‘There will be instances where we compete against each other…we must be clear about when we collaborate and compete.’

Be positive and innovate

As the debate ended, contributors at the roundtable stressed the need to remain positive and continually create and offer solutions amid the unprecedented challenges facing the sector. They also emphasised the importance of standing up for the people being supported and to not compromise on quality, and that means not accepting tenders for services at the lowest price. Putting people who use services first needs to be the driving force. ‘The challenge to us is to actually stand up for the people we are supporting and say it takes this much money to do a quality job… Are we prepared to do it at any price? Most of us are not.’

As one speaker at the event concluded, ‘It’s a tough place and it’s going to get tougher,’ and another speaker said, ‘but we’ve got an incredible staff and value base and we’ve got to make that work better for us by producing more innovative approaches – and maybe a more fiery message.’


Adopt a more proactive approach.

Learn to speak the language of health and present things in a way health partners will understand.

Adapt arguments for different stakeholders. Articulate how your services will benefit stakeholders – including savings to budgets, policy requirements and patient outcomes.

Be honest about the threat of service closure. Invoke dispute resolution, complete with legal advice if necessary.

Come to the table with positivity and solutions, not empty threats.

Collaborate and share information on commissioning processes or service contracts with other providers, with clear definition of when to collaborate and when to compete.

Remain positive and continually create and offer solutions.

Don’t compromise on quality.

Stand up for people who use services.


Professor Rhidian Hughes is Chief Executive of the Voluntary Organisations Disability Group. Twitter: @rhidianhughes

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