PART 1 (OPEN TO THE PUBLIC) ITEM NO. 5 REPORT OF THE LEAD MEMBER FOR ADULT SOCIAL CARE TO THE BUDGET SCRUTINY MEETING ON 3rd OCTOBER 2007 TITLE: Adult Social Care Budget Pressures RECOMMENDATIONS: It is recommended that Members: (i) Consider the contents of this report and be aware of the budget issues affecting adult social care. EXECUTIVE SUMMARY: This report details the pressures and financial strategy for the Community, Health and Social Care Directorate for 2007/08 in relation to Adult Social Care. The Adult Social Services service has successfully remained within budget for the last 6 years to 2006/07, contrary to the experience of other Authorities. This is largely due to: a) Focussing activity on re-enablement, which prevents potential long term care commitments b) A successful efficiency programme to create resources to re-invest to meet growing demand c) The pooled budget arrangements which have allowed joint planning of resources between Salford Primary Care Trust and Salford City Council. d) The flexibility of carrying underspend resources forward as part of the pooled budget arrangements There are pressures emerging for 2007/08 of approximately £500,000 for Learning Difficulties, which can be met from pooled budget reserves. However, the pressure for 2008/09 is estimated at £1.275m above current resource levels. These projections will be considered as part of the budget setting process for 2008/09. Demographic demand pressures in adult/older people services, are creating pressures, which are materialising in the Direct Payments budget area for 2007/08. These are currently being offset by the home care re-enablement service reducing the potential demand for long term home care. The Directorate has mechanisms in place to manage expenditure, but the ability to fully absorb the pressures will be subject significantly to demographic changes – the number of people requiring support and the cost of individual packages of support to meet needs. The budget will be monitored closely during the remainder of 2007/08. BACKGROUND DOCUMENTS: (Available for public inspection) Budgetary control reports 2007/08 Learning Difficulties 2006/07 Outturn report ASSESSMENT OF RISK: Medium – Actions are in place to mitigate cost pressures, but subject to demographic demand pressures SOURCE OF FUNDING: Revenue Budget for Community, Health and Social Care LEGAL ADVICE OBTAINED: Not applicable for this overview report FINANCIAL ADVICE OBTAINED: Accountancy group for Community, Health and Social Care – Jon Higson CONTACT OFFICERS: Keith Darragh, Assistant Director, Resources Tel. 793 3225 WARD(S) TO WHICH REPORT RELATE(S) All KEY COUNCIL POLICIES: All DETAIL: 1. Purpose of Report The Budget Scrutiny Committee requested a report on the pressures facing Adult Social Care services within the Community, Health and Social Care Directorate, to increase understanding of the potential overall impact on financial resources and to assist with future financial planning. The report was requested in the light of national pressures on social care budgets and the volatility of Adult social care expenditure caused by increasing demand and complexity of care, leading to higher care costs and overall expenditure. 2. Background - Adult Social Care Service Objectives 2.1 The Government’s latest White paper for Health and Social Care, “Our Health, Our Care, Our Say” (2006), defines Adult Social Care as: “The wide range of services designed to support people to maintain their independence, enable them to play a fuller part in society, protect them in vulnerable situations and manage complex relationships” 2.2 The range of services commissioned by the Community, Health and Social Services Directorate in Salford has the primary aim of maintaining people’s independence and maximising life chances, by providing appropriate and proportionate social care support to vulnerable people. 2.3 Salford’s strategic commissioning approach recognises that there are broadly two strands needed to meet the growing demands for service which result from an ageing population and people with multiple and complex disabilities: Prevention Modernising Services and developing alternative approaches to support individuals. 2.4 The prevention strategy seeks to delay people needing more intensive support by either re-enabling people or linking them to universal services to create opportunities to slow down any deterioration in their general wellbeing. An effective range of preventive services helps to manage the demand for services now and in the future. 2.5 Salford’s continuous programme of developing modern, fit for purpose services, seeks to commission services that are: the right services, at the right time, at the right quality valued by service users and meeting their needs flexible and adaptable to change meet expectations and standards expected by users deliver on objectives of national and local policy. 3. Salford Adult Social Care – Service and Financial Performance 3.1 The Commission for Social Care Inspection (CSCI) measures the performance of Local Authority Adult Social Care services across the Country and awards a performance score annually. 3.2 Since 2005 Salford Adult Social Care services has achieved the highest performance rating achievable. The current rating is: 3 Star Performance level (highest rating of 3 star – 0 Star) Serving people well = Yes (highest rating of Yes, Most, Some, No) Capacity to improve = Excellent (highest rating of Excellent, Promising, Uncertain, Poor) 3.3 As part of the overall assessment CSCI use a range of specific measurable indicators indicating levels of performance. Salford has achieved the top performance banding (level 5) in the following categories 3.3.1 Helping people to live at home – remaining in their own home / tenancy: People with Physical Disabilities People with Learning Difficulties People with Mental Health Problems Older people (65+) 3.3.2 Intensive Home care support – helping people to live longer in their own homes with intensive social care support, often working jointly with NHS partners who provide community nursing support. 3.3.3 Waiting times for packages of care following assessment – providing services to people who need them in a timely manner. 3.4 Alongside the excellent service performance rating, the Adult Social Services Division within Community, Health and Social Care has contained expenditure within budget resource for the last 6 financial years to 2006/07. This is a very good and sustained financial performance, which is not representative of Adult Social Services across the Country. A number of Authorities have experienced overspends against budgets in recent years, particularly for the Learning Difficulty service. 4. Pressures in Adult Social Care - Strategic Context 4.1 The Wanless review of future demand for older people social care identified that national expenditure on older people would grow from £10.1billion in 2002 to £24billion by 2026 – an increase of 137% if current services are projected forward. This indicated that the pressures in Adult Social Care are a shared national issue which will remain for a very long time. 4.2 Demand for services is rising in the main due to underlying demographic issues: An ageing population – resulting in people becoming frailer and then needing support with everyday personal care Increasing numbers and intensity of adults/older people with disabilities – resulting in people living longer with higher community based support needed from the NHS and Social Care. Rising numbers of people with long term conditions Rising numbers of young people with multiple disabilities moving through from Children’s services Adults with Learning Difficulties living into old age but with associated disabilities 4.3 In addition to underlying demand pressures on the number and intensity of service users needs, rising public expectations is a strong factor in the range of services we commission for Salford people for the future. This coupled with the personalisation agenda for social care services places further pressure to balance highly individualised services with services which can be purchased efficiently. 4.4 In Salford a large proportion of services are procured from the independent sector. All long term residential services and long term home care services are purchased from independent, private and voluntary sector providers. Salford City Council’s in-house provision has been configured to focus on specialised respite and home care re-enablement services. 4.5 Managing the market to provide good quality, adaptable services at an affordable price is an important element in the overall commissioning and procurement cycle. Each year the Local Authority considers the rates paid to the independent, private and voluntary sector for the services they provide. The rates set must secure the range of services required, in sufficient quantities, to meet the statutory responsibility of social care, but within available resources. 4.6 Providers have told us that pay levels for care are at the lower end of pay levels generally, so there is a disproportionate impact of changes to their workforce costs when national minimum wages and holiday entitlement are introduced. National improvements in employment conditions therefore have to be taken into account when negotiating with providers in Salford. 5. Budget Setting 2007/08 5.1 The budget for Community, Health and Social Care for 2007/08 was set with the following resource constraints: A £1.2m efficiency target £1m unfunded pressures within Learning difficulties arising from a reduction in Supporting People grant £0.4m and additional estimated costs of young people transferring from Children’s disability services to the Adult Learning Difficulty service £0.6m 5.2 The Directorate has set a programme of change to achieve the efficiency target of £1.2m, which is being implemented around e-procurement for home care services, transport efficiencies, staffing (reducing overtime, agency and recruitment costs), maximising income and reconfiguring home care re-enablement services. 5.3 The Learning Difficulty service identified a range of actions to reconfigure services to generate efficiency savings to offset the £1m budget pressures. These are shown below Closing internal properties and re-commissioning services in the independent sector Reviewing core packages of people supported Bringing people back from out of borough places and specialist placements to local provision within Salford 5.4 Additional resources were allocated to the Directorate to meet identified growth in demand which materialised in the Direct Payments (£0.4m) and Residential accommodation (£0.2m) budget areas during 2006/07. 6. Budget Projections 2007/08 6.1 Budgetary control forecasts for 2007/08 for Adult Social Care (based on budget monitoring to the end of August 2007) indicate current financial pressures in: 6.1.1 Learning Difficulty services - £500,000 6.1.2 Adult / Older people services – overall lower expenditure on long term home care has offset growing pressures on Direct Payments 6.2 The Learning Difficulty services £500,000 budget pressure for 2007/08 can be met from accumulated previous years surplus, within the pooled budget arrangements with the Primary Care Trust. However, this will leave an unfunded ongoing pressure of £500,000 going into 2008/09, before any new/additional pressures from growing demand / reductions in Supporting People are taken into account. So overall it is expected that the Adult Social Care expenditure can be kept within the resources allocated for 2007/08. 7. Budget Pressures 2008/09 7.1 Currently the main budget pressure which will impact on the 2008/09 budget is the Learning Difficulty service. The main drivers for the budget pressures within Learning Difficulties are: 7.1.1 people with Learning Difficulties living longer – resulting in higher full life costs 7.1.2 sustained growth in numbers of people with Learning Difficulties entering the service over the next 10-15 years 7.1.3 better medical interventions means that people are surviving with greater support needs. Individual support costs can be as high as £250, 000 a year for the most complex needs 7.2 The Learning Difficulty service will show the greatest short term financial pressure in the 2008/09 budget setting process with a total of £1.275m. This is made up of the following elements Projected pressure from additional cost of placements / reduced supporting people income in 2007/08 - £500,000 2008/09 full year effect of placement costs of people placed for part year in 2007/08 £400,000 2008/09 part year effect of new people entering services for the first time in 2008/09 £175,000 Potential reduction in supporting people funding to joint tenancy schemes in 2008/09 £200,000 7.3 The costs for young people coming into the service in 2008/09 are estimated, pending an assessment of their need by the Learning Difficulty service. Also, family support arrangements for young adults may change resulting in a need for re-assessments and re-calculation of costs. 8. Learning Difficulty Strategy to Manage Budget Pressures 8.1 The strategy to manage budget pressures for the Learning Difficulty service is based on good service planning supported by three key elements: 8.1.1 Pooled budget partnership 8.1.2 Governance arrangements of the pooled budget 8.1.3 Learning Difficulty service efficiency programme 8.2 The Learning Difficulty service is managed as part of a pooled budget partnership with Salford Primary Care Trust. This has provided the benefit of joint financial planning and single management structure for health and social care needs of people with Learning Difficulties. 8.3 The pooled budget partnership also provides for a single management structure and governance though the Partnership Board. This has facilitated financial planning for Health and Social Care under a single process, with joint responsibility for managing the budget. 8.4 The Learning Difficulty efficiency programme has been actively managed over the last 5 years to generate savings to meet increased cost forecasts from demographic changes. The plan has centred around the following actions: 8.4.1 Review of home care contract with independent advocacy services and negotiating reductions in level of payments; 8.4.2 Reductions in agency and overtime working within supported tenancy network to reduce salary and wage costs; 8.4.3 Reorganise and rationalise tenancy network to reduce vacancies for service user tenancies; 8.4.4 Assess and review people in out of borough placements and to bring back to Salford, reducing overall care costs, 8.4.5 Increase income from independent living fund claims and 8.4.6 Review support needs of tenants to ensure support is meeting personal care only. 8.5 As part of the pooled budget arrangements the Learning Difficulty service is allowed to carry forward underspends. The accumulated balance estimated to be available for 2008/09 is £450,000 9. Adults/Older People Budget Pressures 9.1 The main drivers for the emerging budget pressures within Adults/Older People Services are: 9.1.1 more people being supported at home with more complex needs; 9.1.2 faster discharge from hospitals with higher initial care needs 9.2 The demand for other adults and older people services is increasing in line with local and national trends. However, the additional demand has been offset by the pro-active work of the re-enablement team which has reenabled people and therefore diverted people from being dependent on long term care services – in 2006/07 this has been calculated to have been a £1.2m efficiency saving. 10. Adults/Older People Strategy to manage Budget Pressures 10.1 The strategy to manage budget pressures within adult/Older People Services is centred around the following: 10.1.1 Contracts & Commissioning – set contractual frameworks with agreed weekly rates to ensure care is purchased at competitive standard prices; 10.1.2 Managing demand through rehabilitative services which divert service users from intensive long term care packages 10.1.3 Principal Managers budget meeting held monthly to identify trends and take appropriate strategic actions to manage eligibility thresholds and consistent commissioning activity; 10.1.4 Promote independence and signpost to universal services where appropriate. 10.2 The strategy has successfully contained expenditure for Adult/Older People Services over recent years. The whole range of actions will be pursued to manage expenditure, but the ability to fully absorb the demographic pressures and associated costs will need to be determined. 11. Conclusions 11.1 Learning Difficulty and Adult/Older People Services are demand driven personal services providing support to some of the most vulnerable people in Salford. 11.2 The services have identified good financial management strategies which control cost, establish contract frameworks, manage demand and promote independence. 11.3 The Directorate has mechanisms in place to manage expenditure, but the ability to fully absorb the pressures will be subject significantly to demographic changes and the impact of the home care re-enablement service. 11.4 Current expenditure projections for 2007/08 can be contained within existing budget levels coupled with the utilisation of internal balances from the pooled budget arrangements with the Primary Care Trust. 11.5 The major impact of the pressures will be experienced in 2008/09 if trends continue on the current course for Learning Difficulties, with additional financial pressures of £1.275m forecast. This will be further evaluated for the budget setting process 2008/09.