The Comprehensive Spending Review: Challenging Times
Michael Patterson summarises the Comprehensive Spending Review and sees some possibilities for the sector through the gloom.
The much anticipated Comprehensive Spending Review has now been published and my task is to understand, interpret and set out here what it means for people involved in housing support and social care. You may well find it helpful to download the full Comprehensive Spending Review Report itself by clicking here and using it as a reference.
The messages coming from provider representative organisations and other bodies are gloom-laden but it is always important to identify where there is potential for the sector to develop new roles and possibilities. The message from the Government through the Comprehensive Spending Review is that the sector should have an enhanced role and enhanced resources to deliver with; it remains to be seen whether that enhanced role is given the resources and infrastructure to deliver.
The context behind the Comprehensive Spending Review is that of the economic crisis and the political response by the coalition government is one of radical surgery in an attempt to remove the UK's structural deficit within 4 years, that is, by 2014-15. It is important firstly then to note that the Comprehensive Spending Review will be implemented over a 4 year period although some wider reforms to which it relates such as the introduction of the Universal Credit, will take up to 10 years.
The average Government department budget reduction is 19% over 4 years but the Government departments with which our sector has most connection show a mixed picture. The CLG will see a budget reduction of 51% by 2014-15, although part of this is through the devolution to local authorities of £1.6bn. The NHS will see growth of 1.3% in its programme and administrative budget but a cut of 17% in its capital budget. The Home Office will lose 23% of its programme and administration budget and 49% of its capital budget. The DWP will gain 2.3% in its programme and administrative budget and will lose 5.5% of its capital budget. Undoubtedly though there will be further measures over this period and we at Support Solutions will keep a watching brief on developments and report accordingly
The Comprehensive Spending Review is heavily weighted towards welfare reform and reductions in the cost of the welfare state to the tune of net savings of £7bn per year up to 2014-15. It places much emphasis on the creation of the Universal Credit system to replace the current system of means tested benefits. The Universal Credit system is still very much at the design stage and lacks detail, especially in relation to how vulnerable people will be treated by the system. However, some detail is beginning to show, for example, "household benefit payments" (i.e. the total amount of benefit income receivable per household) will be capped at £500 per week for a couple or single parent family and £350 for single adults. DLA recipients are exempted from this (as are War Widows and working families claiming Working Tax Credit). However, DLA recipients living in residential care homes will lose their entitlement to the Mobility component of DLA. What is not clear is the situation upon the introduction of Universal Credit for non DLA recipients who are deemed "vulnerable" such as those on Income Support or incapacity Benefit at present.
Employment and Support Allowance will now be limited to 1 year except in the case of "severely disabled" people.
Localisation & Personalisation
Support Solutions has emphasised repeatedly since the idea of lifting the Supporting People ring fence was first floated in March 2005 that both Governments which have held power since then are of the same view that ring fenced budgets are expensive, bureaucratic and not reflective of the holistic needs of individuals and communities. This Comprehensive Spending Review takes this view very strongly and reduces the number of ring fenced budgets payable to the statutory sector by central Government from 90 down to 10, although it does introduce a new ring fenced budget called Public Health Grant (more about that later).
Continuing on this theme the Comprehensive Spending Review identifies that a Pilot Scheme will be run within 16 local areas to pool departmental budgets (health, social care etc) for families with "complex needs" with the intention of a national rollout by 2014-15.
The Comprehensive Spending Review promotes the idea of extended use of personal budgets across the full range of health and social care need and also for children's services and special educational needs. The Government believes that personal budgets are more cost-effective and less reliant on expensive infrastructure so that expanded use of them should save money.
There is an emphasis on prevention and re-enablement which is consistent with the focus on expanded use of personal budgets and the £2bn in social care funding, half of which is comprised of a new Public Health Grant. Given the blurring of statutory sector boundaries and the enhanced role of the Voluntary & Community Sector it is important for sector providers to strategise about how they respond to this.
The Comprehensive Spending Review also promotes the breaking down of barriers between health and social care. This is consistent with across the board personalisation, consistent with cost savings and consistent with reform of the public sector although it's not described as that. Public sector reform will also take the form of the loss of up to half a million public sector jobs and increased public sector employee contributions to their pension scheme.
An Enhanced Role for the Voluntary & Community Sector
The Comprehensive Spending Review promotes the notion of small Government and Big Society by increasing the emphasis on localisation: expenditure decisions being made at local level by smaller local Government structures and with an increased role for the Voluntary & Community Sector and private companies. This is a significant point which seems to have been overlooked by most commentaries on the Comprehensive Spending Review so far and I will return to this later. There is also confirmation of the abolition of the National Indicator Set and of Local Area Agreement targets and infrastructure so providers will need to identify locally how strategic relevance is going to be defined and funded.
The Government has identified an additional £2m of funding for social care by 2014-15 and £470m for capacity building within the Voluntary & Community Sector, including £100m (£10m this year and £90m next year) by way a of Transition Fund to help medium and large Voluntary & Community Sector organisations which face significant hardship in adjusting to take on an enhanced role in delivering services primarily at the expense of the public sector which faces shrinkage. The Government is drafting a White Paper to consult on this early next year.
The Comprehensive Spending Review talks openly about an expansion of the role of the Voluntary & Community Sector. This will take the form of a Government strategy to tender more public services to the Voluntary & Community Sector and private sectors on a "payment by results" basis. Such services include community health, prisons and probation, children's centres, welfare to work (the New Work Programme), mental health, the rehabilitation of offenders, adult social care, early years services, family intervention, court and tribunal services.
Perhaps surprisingly, Supporting People funding largely survives although in a reduced amount of £6bn over 4 years. However, it is obviously being rolled into local authority formula grant so there will be no restriction on how it is spent. Perhaps this is recognition of the value of the preventative and enabling services it funds and the role of sector providers within the preventative agenda. The absorption of Supporting People funding within local authority formula grant is consistent with the Government's deliberate policy to move away from ring fenced funds and requires Voluntary & Community Sector providers to evolve, remodel and diversify the types of services they offer and to recast their relationships with commissioners.
These are early days and the majority response to the Comprehensive Spending Review from the sector has been negative. However, it is important in our view that the Voluntary & Community Sector looks closely at what lies within the Comprehensive Spending Review. It is challenging, there is no doubt about that, and its assumptions around cost savings through efficiency will have to be put to the test. The Government is, however, effectively inviting the Voluntary & Community Sector to take on an enhanced role, arguably at the expense of the Public Sector, and is offering funding to build capacity within the Voluntary & Community Sector to gear up to take on a wider range of roles and services under different and more challenging contractual arrangements ("payment by results"). We have re-emphasised countless times when talking about Personalisation, for example, that the Voluntary & Community Sector needs to evolve, remodel and diversify: never was that more true than now, whatever we feel about the Comprehensive Spending Review.
Michael Patterson firstname.lastname@example.org
(Added to site Thursday, October 21st, 2010)
Other Articles In This Issue
Revenue Optimisation "I am really impressed with Support Solutions and how small organisations are supported with information and training" Susan Harrison (Tenant Support Services)