Following a similar survey in January predicting a social services overspend of£205m in 2000/01, an updated survey was published today by the LGA, the Association of Directors of Social Services, and the Societies of County and Municipal Treasurers, revealing that despite concerted efforts to control costs, 75% of social services departments actually overspent by£183m.
The survey reveals a growing gap between central government allocations and local government spending. It shows that most local authorities (55%) do not believe they will be able to sustain or improve their social services for 2001/02 and 85% per cent of councils believe additional health related funding will be significant in helping them prevent bed blocking.
Cllr Rita Stringfellow, chair of the LGA's social affairs and health executive said: `This survey highlights that elderly people and children are on the front line of this financial crisis in social services.
`Even without the additional overspend pressures of around£200m, social services budgets are already almost£1bn above government provision - with more than half of that due to local authorities' spending more than the government recommends, in order to drive up standards in children's services.
`Local government's increased focus on the quality and continuity of care provision has meant that councils are giving an increasingly greater financial priority to social services. But there is clearly a gap between central government's funding formula and local authority budgets.
`The problems of funding services for older people are compounded by the funding pressures of children's services.
`We recognise and welcome the efforts that the government has made in responding to some of the difficulties faced by social services. But this survey highlights the need for local councils to receive additional direct funding to cope with what are likely to be immense and growing demands.'
Commenting on the results of the survey LGA chairman Jeremy Beecham said: `We will continue to work with ministers to examine ways in which central government can help us address these problems swiftly. I have called for an urgent meeting with health secretary, Alan Milburn, to discuss the resources of personal social services'.
- An executive summary of the survey appears below. If you would like
accompanying tables and or the full budget document, contact LGCnet.
* see LGCnetfor Association of Directors of Social Services comment.
LOCAL AUTHORITY SOCIAL SERVICES BUDGET POSITION
In response to continuing concerns of local authority elected
Members, Directors of Social Services and Treasurers/Chief Finance
Officers about escalating budget pressures and overspending on social
services by very many councils, a further comprehensive national survey
was undertaken in July 2001. 138 of the 150 authorities in England
responded to the survey.
Analysis of the July 2001 budget survey reinforces the position
of local authority social services budget pressures described in a
similar survey 6 months previously. Despite actions to reduce the
threatened overspend by the end of the last financial year, the final
position of social services expenditure in 2000/01, at£183m in excess
of original budgets, was only some£22m less than the earlier£205m
overspend predicted. 75% of authorities overspent in 2000/01. A graph is
attached showing the percentage overspends against budgets. More
importantly, the prospects in the current year and for 2002/03 are
considered to be even more worrying for local authorities.
3. THE GROWING GAP
The continuing pattern of spending around 2% in excess of
original budgets set by local authorities (about£200m) is on top of the
already growing gap between the government's funding formula for social
services and the budgets set by local authorities. Budget returns to
central government for 2001/2002 confirm that local authorities have
given even greater priority to social services. Social services budgets
have increased this year by nearly 6%. Social Services budgets for
2001/02 are almost£1bn above government provision, even before the
additional overspend pressures of around£200m.
For 2000/01, 138 authorities reported 1.9% (£168.5m)
overspending, the equivalent of£183m for all 150 authorities in excess
of budgets. Most of this overspending was internally funded by
authorities and not carried forward against 2001/02 budgets. However,
authorities were expected to carry forward£24m overspending.
It was not directly possible to compare all aspects of the
January and July surveys. 33 authorities reported£41m additional/late
in the year budget supplementation. 32 authorities had already received
£32m supplementation at the time of the January survey. There were also
differences in the ways some local authorities treated asset rents and
5. 'WINTER PRESSURES' AND THE HEALTH SERVICES
The impact of the government's direct funding of 'winter
pressures' or health authority transfers has been considerable. £46.4m
was added to social services' budgets in 2000/01 but with worrying
'knock on' implications of£172.7m in 2001/02. £21.5m of the 2000/01
overspending was attributed to delivering on the 'winter agenda'.
85% of authorities regarded additional health related funding as
significant in improving their performance in respect of delayed
hospital discharges. However, for 2001/02 the majority of authorities
(55%) do not anticipate being able to maintain or increase their level
of services of the last two years and the majority (51%) do not expect
their share of the additional Promoting Independence Grant from
government to cover the cost in 2001/02 of additional care packages
entered into over the last winter.
6. CHILDREN'S SERVICES
The particular pressures on children's services described in the
January Survey - 64% of the total predicted overspend - have been
reaffirmed by the July Survey. Local authorities are spending more than
£0.5bn in excess of SSA on children's services (an average excess of
27.4%) and are concerned about the unavoidable budget pressures of
meeting the needs of the most vulnerable and at risk children and young
people. Local authorities have welcomed their inclusion by both LGA and
ADSS in the further consultations and analysis being undertaken by
government currently - Department of Health and Treasury.
7. SOCIAL CARE MARKET FRAGILITY
There are widespread concerns, particularly in some parts of the
country, about the availability and escalating costs of appropriate
nursing, residential and domiciliary care services, most especially for
older people, but also for adults with physical or learning
disabilities. Very considerable concerns were expressed in relation to
budget uncertainties and risks for 2002/03, particularly those related
to the changing statutory responsibilities around Free Nursing Care,
Preserved Rights, National Care Standards Commission, Charging for
services, etc., and the potential impact of these changes destabilising
still further the current fragile state of the social care market. 77%
of authorities reported that the availability of nursing, residential or
domiciliary care capacity (or by implication) availability at a cost
which could be afforded, was significant in their ability to make most
effective use last year of additional 'one year only' winter monies from
8. PROSPECTS FOR 2001/02 AND BEYOND
87% of authorities responding report a gap in 2001/02 between
demand (which falls within existing eligibility criteria) and budget,
estimated at£186.6m. 59% of local authorities have tightened, or
propose tightening, their eligibility criteria to manage demand
Over half (54%) of authorities report a worse budget position in
2001/02 compared with 2000/01. 25% say there will be no improvement on
2000/01. There is already a predicted overspend of 1.8% in 2001/02
across the authorities who responded to the survey.
While local authorities recognise and welcome the response of
central government in addressing some of the pressures described in this
survey, the financial challenges for local authority social services in
2001/02 and projected ahead into 2002/03 are immense. There are
pressures of need, demand, statutory duty, workforce availability,
market capacity and cost increases in excess of inflation. The Local
Government Association, Association of Directors of Social Services and
Treasurer organisations will be urging government to respond to the
budget pressures described by this survey in their financial planning
for 2002/03, 2003/04 and beyond, and more urgently over the coming