Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 11th June, 2012
Report of the Leader, the Cabinet Member for Social Care and Health (Adults), Lifelong Learning and Libraries
Impact of the Social Care Charges (Wales) Measure 2010 and the First Steps to Improvement Requirements
Purpose of the Report
1. To update Cabinet regarding the 2011/2012 financial impact of implementing new Welsh Government policy in respect of charging for non residential social care services.
It is recommended that Cabinet:
1. Notes the contents of this report.
2. Continues to receive regular updates on progress made in resolving issues with the Welsh Government.
Reasons for the Recommendations
2. & 3.To ensure that Cabinet is aware of the implications for the Council's budget and
endorses the actions taken.
2. The Social Care Charges (Wales) Measure 2010 gave local authorities in Wales a discretionary power to impose a reasonable charge upon adult recipients of non-residential social care services. The Welsh Government was provided with authority to determine the maximum charge any service user could be asked to pay. These changes were introduced to address concerns expressed by some stakeholders that, because of significant differences in local authority policies, charges for services varied considerably across Wales according to where an individual was living.
3. There followed a period of dialogue between the Welsh Government and local authorities to examine the likely consequences of introducing a charging cap, especially regarding reimbursement for lost income. In January 2011, before implementation of a proposed £50 cap, local authorities were asked to provide information regarding the number of people in receipt of non-residential social care for a particular week of their choice. This Council chose a week in August 2010, when there were 930 service users; 497 were paying charges, of whom 148 were identified as being charged more that £50 per week. Calculations were made on the basis of 2009 charging policies and it identified that the potential income foregone was £208k.
4. The Welsh Government was aware that this exercise did not include any provision for the possible impact of any cap upon numbers of service users or their take up of services; these factors were not built into the model used. The total for all local authorities was £10.1m and the Welsh Government decided to allocate this via the Revenue Support Grant (RSG), with the expectation that the actual impact for each local authority would be monitored closely.
5. The First Steps to Improvement requirements imposing the £50 cap were introduced very quickly, in advance of pending National Assembly elections. They came into effect on 11th April 2011 and the relevant Regulations were only published after the event. The allocation of funding was based on the Relative Needs Formula and, to meet the income foregone or additional cost incurred as a result of implementing the new policy, the Vale of Glamorgan received £373k in the RSG for 2011/12.
6. It is the opinion of officers in the Council that using the Relative Needs Formula to distribute the First Steps to Improvement grant within the RSG is flawed. It contains indicators of need under three main categories: Main Client Group, Population Dispersion and Deprivation. However, it is unlikely that the Deprivation factor would have a bearing on the impact of the £50 cap, given that the highest impact on local authorities is likely to result from the emergence of more affluent service users who previously would have funded care themselves. Any decision by the Welsh Government to continue using the formula on the existing basis for distributing First Steps to Improvement grants would be to the detriment of some local authorities, including the Vale of Glamorgan.
Relevant Issues and Options
7. The Welsh Government has been monitoring the impact of the new legislation and the current Regulations. An initial half-year monitoring report, involving a very detailed analysis, was submitted by all local authorities in November 2011. This estimated that the additional annual costs to this Council were £1.396m. Understandably, given the scale of the increase, the Welsh Government asked officers in the Vale of Glamorgan to undertake further work with the assistance of Internal Audit to verify the figures. This resulted in a small number of alterations to the claim form and a revised figure to meet the costs of implementation that was approximately £650,000 more than the grant received.
8. Information obtained by Vale of Glamorgan officers in November 2011 through surveying other local authorities identified that:
· some had experienced a decrease in their original estimate of income foregone;
· the majority were estimating a slight increase of between £10k and £200k; and
· a small number had identified increases of between £300k and £400k - like the Vale of Glamorgan, these were authorities which did not have a maximum charge previously.
9. Deeply concerned by the fact that implementing the new policy had produced a considerable overspend in the adult services budget, the former Cabinet member for Social Care and Health raised the matter with the Deputy Minister for Children and Social Services on a number of occasions. In meetings with the Director of Social Services, Welsh Government officials reported that they were unable to act without end year figures for all local authorities.
10. The deadline for submitting final returns for 2011/12 was 16th May, 2012. The Social Services Directorate worked very closely with officers from Finance and Internal Audit in producing the figures for this Council. The impact in the Vale of Glamorgan has increased still further with the total foregone income now estimated as £1.776m for a full year, based on actual figures of a week in February 2012. This means an additional cost to the Council of £1.4 million once Welsh Government funding has been deducted. As required by Welsh Government, Internal Audit has again undertaken a verification exercise to enable the Council's Section 151 Officer to validate the estimate of income foregone and this report has also been submitted with the return.
11. It appears likely that this Council will continue to experience disproportionate losses in income when compared to other Welsh local authorities. There are a number of factors that may explain this divergence.
· Before April 2011, like a small number of other local authorities, the Vale of Glamorgan did not have a cap on how much an individual could be asked to contribute towards the cost of their care in cases where they either failed to disclose their finances or where a financial assessment revealed their savings/investments exceeded the limit of £22K. Consequently, at that time some service users were paying considerably more over the £50 cap now in place.
· There were a high number of individuals funding their care, either because they were financially assessed as being able to do so or because they chose not to declare their income to the Council. As a result, the Vale of Glamorgan has seen a marked increase in the number of people who have requested support from Social Services because their contribution is capped at £50 per week. Analysis shows that the number of services users has increased from 141 in August 2010 to 335 in February 2012. Of these 335 individuals, 184 are new clients and it is estimated that 158 (86%) of them would have been self funding or not willing to disclose their income under the previous policy. There is some evidence that independent providers of social care in the Vale of Glamorgan have been especially active in encouraging self-funders to seek services from the Council in the light of a set maximum charge.
· The Council has a duty under legislation to notify any person who receives a chargeable service or who may receive a service inviting them to undergo a financial assessment to qualify for the maximum contribution of £50. The Social Services Directorate has acted very promptly to re-assess existing cases where people were making contributions of over and above £50 towards their care were and, therefore, the difference is also a loss of income to the Council.
· Because a high proportion of service users had previously sought social care services privately, the Vale of Glamorgan had relatively low numbers of older people for whom it organised services. Hence, there is an element of "catch up" now.
12. To date, the Welsh Government has not agreed to address the shortfall in funding. Officials have said that they will consider the end year monitoring returns from local authorities and Ministers can then consider what, if any, changes are required to the arrangements already put in place. It appears likely that:
· some local authorities may be asked to do some further work (to help Welsh Government understand why levels of lost income from service users differ between local authorities); and
· subject to Ministers' intentions, they may be consulted about any plans for reform.
13. The Director of Social Services met with the Chief Executive of the WLGA, who has:
· asked all Welsh local authorities to provide details of the end year submissions made to the Welsh Government, for comparative purposes;
· written to the Welsh Government requesting an urgent meeting with the Deputy Minister and her officials, to involve the Leader of the Vale Council, the Cabinet member for Social Care and Health (Adults) and relevant officers to discuss the serious consequences for the Council.
Resource Implications (Financial and Employment)
14. The recent submission to Welsh Government indicates that, in implementing the new policy, the Vale of Glamorgan is losing £1.776m in income but received only £373k in compensation.
15. When calculating that ongoing cost pressures for social services carried forward from 2011/12 to 2012/13 would amount to £3.22m (as the basis for a reserve fund available to the Directorate in managing its budget programme), it was assumed that the Welsh Government would provide further funding to compensate the Council in full for lost income. If this is not the case, the level of savings required will increase accordingly.
Legal Implications (to Include Human Rights Implications)
16. There are no legal implications arising directly from this report.
Crime and Disorder Implications
17. There are no crime and disorder implications arising from this report.
Equal Opportunities Implications (to include Welsh Language issues)
18. There are no equal opportunities implications arising out of this report.
19. Key objectives of the Council addressed by this report are:
· to make the Vale a safe and healthy place in which individuals, children and families can live their lives to the full; and
· to manage the Council's workforce, money and assets efficiently and effectively in order to maximise its ability to achieve its service aims.
20. This report is a matter for executive decision.
21. There are no matters in this report which relate to an individual ward.
Corporate Management Team
Relevant Scrutiny Committee
22. Social Care and Health
16th November, 2011 Report of the Leader and the Cabinet Member for Social and Care Services - Pressure on the Social Services Revenue Budget 2011/2012 and Budget Recovery Action Plans
Philip Evans, Director of Social Services
Sian Davies, Director of Resources