Bending the Curve in Social Care

These factors together with cost increases such as the national living wage, higher national insurance contributions and the apprenticeship levy all contribute to huge challenges in achieving financial and operational sustainability.

The latest ADASS budget survey indicates that Adult Services overspent by £366m in 2016-17, more than double the overspend in the preceding year of £168m. For children’s social care an LGA analysis of 2015/16 spending published in August 2017 revealed that 75% of councils overspent on children’s services with an overall overspend of £605m. So total overspending across Adult and Children’s Services is likely to have reached £1bn in 2016/17 – an average of over £7m per council. There are substantial risks that at this level of overspend that some councils will run out of money. This issue was also noted in the above 2018 NAO report which stated that the combination of rising demand and statutory services means there is limited room for manoeuvre in delivering further savings within social care- leading to risks of financial sustainability. 

Many local authorities are drawing down their reserves to help balance budgets, however this is a short-term fix. The NAO noted that 10.6% of local authorities with social care responsibilities would have the equivalent of less than three years’ worth of reserves left if they continued to use their reserves at the rate they did in 2016/17.

So what is the solution?

We need to look at a variety of options ‘to bend the curve’, ie: 

• data analytics - demographics, demand and market provision
• increasing capacity 
• bricks and mortar costs - avoiding expensive PFI type packages
• financial modelling of options
• learn from best practice. 

Looking at each of these in turn, none is a quick and easy fix, however best practice from other local authorities has shown there are ways to ‘bend the curve’ to ensure a more sustainable service. Systematic approaches to review activity and prices across the market is a critical starting point. If demographic trends and current costs of activity are modelled it gives us the data to establish a pro-active forward looking plan. Without this research authorities could be making short-term reactive decisions which may not give the best outcomes in the long term. The full cost of care and the different options in packages or placements need to be understood by those making the decisions. Outcomes are of course paramount but they do come with a financial impact. 

It is crucial there is recognition that finance is not the sole burden of the accountants, it must also be understood and owned by those making care decisions within the operational or front line side of the business. 

We also need to consider how we can increase capacity across the care sector. Many authorities are examining their current provision and through better commissioning and/or increasing in house facilities are seeing a more sustainable and pro-actively managed service. This in turn should equate to better outcomes. 

It is interesting to note that in one authorities children’s social care service Ofsted reported on “the corporate failure to ensure there is sufficient capacity within almost all areas of the service”, with this lack of capacity and funding being “a significant underlying contributory factor to the deterioration in the quality of help that children receive.”

Bricks and mortar costs are an important aspect of provision, we need to continue to avoid arrangements where bricks and mortar are funded by providers seeking much higher financial costs than traditional borrowing. The 2018 NAO report on PFI showed that for many public sector builds this was between 2% and 4% more expensive than other government borrowing, and involve significant additional fees.

Mapping and understanding the data is critical. Data analysis which models options of different care packages can help authorities plan their activity in the most cost effective way to deliver the best outcomes. This may mean increasing in house provision at the expense of more costly agency or private sector care, this does however bring many challenges include affordability and resourcing as we ‘invest to save’. 

CIPFA has recently undertaken analysis of the best performing councils for both adults and children’s social care. It is recognised that such an analysis has some drawbacks – as there can be pioneering work being undertaken outside the lists shown below – but it provides a useful starting point.

The children’s analysis drew on an analysis of the financial and performance data from the 36 councils ranked by Ofsted as good or outstanding. This suggests that the best outcomes for Children and Families and the best use of resources will be achieved through:

• early help to reduce social work referrals and subsequent demand
• edge of care, tackling domestic abuse, identifying the vulnerable, exploited, missing and trafficked to reduce risks of escalation of response
• shorter length of care proceedings and more effective court arrangements through well prepared documentation leading to less use of expensive expert witnesses and delays to care orders, adoption orders
• increasing the pool of local foster carers and adoptee families
• imaginative use of the pupil premium for looked after children 
• a passionate commitment to care leavers
• sensible staffing workloads of 14 to 17 children to each social worker and continuing drives to recruit and retain social workers and reduced use of agency staff 
• more recently, integration of early help and intervention services across social care, education, public health, health, police and probation - underlined by the recent announcement of joint targeted area inspections of multi-agency working for children living with or at risk of neglect
• cost effective commissioning and other enablers including corporate council commitment and investment. 

The adults analysis draws on the financial and performance information from examples of councils and council areas mentioned in from NHS England’s annual report, Public Health England’s Commissioning for Value Long Term Conditions pack, areas rated as outstanding or advanced for their sustainability and transformation plans. The evidence suggests the following deliver good value:

• prevention 
• faster and more effective diagnosis 
• reducing emergency admissions to care 
• earlier discharge and reducing delayed transfers of care 
• extending reablement 
• more cost effective care for those with long term conditions – including self-management of care, e-clinics and more effective prescribing 
• more cost effective care for those with learning disabilities, in care homes and end of life care
• integrated commissioning and market management to meet future need 
• integrated care including the use of multi-specialty community providers. 

Even with good practice and forward planning there will still be unexpected demand and hence uncertainty. Some of this can be addressed through good longer term financial planning - but all authorities need some contingent financial planning which ensures that the unpredictability of demand – however well managed - does not adversely affect their ambition for the most vulnerable in society.  

It is recognised that none of these are quick and easy fixes, it is however essential that data analysis is mapped and understood and that decisions made are based on robust information. 

CIPFA is currently working with local authorities in reviewing adults and social care. This includes a range of areas, from the role of finance in supporting the social work side, enhancing the understanding of service managers on ownership of budget and the financial impact of decisions, data analysis of demographic trends and care needs, market analysis, gap analysis and financial modelling of options across the authorities’ boundaries.