Social care inquiry written submission from the Voluntary Organisations Disability Group (VODG)

Key messages

• People are using care services at a time of unprecedented demographic change and financial austerity. Fewer and fewer disabled people are eligible for services and unmet need is on the rise. High quality care must be funded to enable disabled people to have their needs met.

• The continued squeeze on fees has led to social care markets, worth over £43 billion per year, being fragmented and unstable. Without adequate funding voluntary organisations will exit the market causing further market instability.

• Financial constraints are stifling innovation. The dilemma around mainstreaming technological developments is that it requires significant up-front investment, which can generate long-term savings, but local authorities rarely commission these solutions.

• Government needs to be alert to the fact that social care markets could collapse. Local markets require good management, and as part of this the costs of procurement and regulation need to be controlled and kept low. Central to this are the fees that are paid to providers, which must be set at a level that will enable people using services to have their needs met through the provision of high quality services.

• Should social care markets fail, the lives of millions of people who use services will be negatively affected. There will also be a direct impact on the NHS as demand increases for emergency and hospital services.

• Sustainable funding for the sector will enable disability organisations to invest in their people – to further build careers in the sector, to recruit and retain the right staff and to pay the workforce at a rate that recognises the value of the work they do in society. The national living wage must be properly funded.

Introduction

1. VODG (Voluntary Organisations Disability Group) is a national charity that represents leading not-for-profit organisations who provide services to disabled people in ways that promote independence, choice and control. Our members work with around a million disabled people, employ more than 85,000 staff and have a combined annual turnover in excess of £2.5 billion. Though diverse in terms of their size, history and individual strategies, our membersshare common values. These are clearly discernible through work that promotes the rights of disabled people, approaches to citizenship, user choice and control and in successfully delivering person-centred services.

2. VODG works on behalf of members to influence the development of social care policy, build relationships with government and other key agencies, promote best practice and keep members up to date on matters that affect service delivery. Our overarching aim is to ensure that VODG members, working in partnership with commissioners, people who use services and their families can provide progressive, high quality and sustainable services that reflect Think Local, Act Personal[1] principles, uphold rights and meet the requirements of disabled people.

3. VODG welcomes the opportunity to submit this representation to the Communities and Local Government Select Committee on the inquiry into the financial sustainability of local authority adult social care[2]. We also recognise and endorse the submissions being made by our member organisations[3] and our other key stakeholders including the Care and Support Alliance. We use this submission to draw out those issues most relevant to disability, care and support providers and the people they support.

Context

4. There are 9.9 million disabled people living in England who represents 19 per cent of the overall population[4]. This includes a significant number of working age adults who require support with their mental health, or who have learning and social or behavioural impairments.

5. The Centre for Disability Studies[5] estimate the growth in the numbers of adults with physical and learning disabilities:

• Support will be required for an additional 6,000 to 46,000 young adults with physical disabilities over ten years. This equates to a ten-year growth rate of between 32% and 239%.
• Between 37,000 and 52,000 adults with learning disabilities will require support over the next ten-year period, resulting in a growth rate of 26% to 37%.

6. Alongside these working age trends, the number of older people is rising. The latest Census data demonstrate 9.2 million older people aged 65 years and over, with 52 per cent of people living with a long-term health problem or disability. This includes a far greater proportion of the population aged 85 and over.

7. The role of third sector disability organisations is significant. The aggregate cost of social care services provided by third sector organisations for example is estimated to be at least £7.2 billion per year. Of all public service areas, social care is thought to have the greatest involvement from the third sector[6]. However, across the third sector the combined effect of current forecasts is a £4.6 billion annual shortfall in overall sector income by 2018/19, simply for the sector to maintain its 2012/13 spending power[7]. These shortfalls will impact on third sector activities across health and social care.

Key themes

8. We organise our submission around VODG’s strategic priorities, which represent the key issues our members have asked us to focus on:

• Funding and commissioning,
• Workforce, and
• Policy, regulation and legislation

Funding and commissioning of adult social care

9. Within the context of demographic change, funding to support disabled and older people has been significantly reduced since 2010. In the five years to 2015/16 local authority funding of adult social care reduced by £4.6 billion (a 31% reduction in net budgets). In 2015/16, 82% of directors of adult social services report that the quality of care is compromised as a result of these savings being made.

10. The 2015 Autumn Statement enabled local authorities to raise council tax by 2% for adult social care (the precept) in 2016/17. This has meant a slight rise in the overall budget. However the Association of Directors of Adult Social Services (ADASS) calculates that this raises less than two thirds of the overall costs of implementing the national living wage[8].

11. For 2016/17 directors of adult social care report that they plan to make further savings of £941m or 7% of the overall budget. They estimate that a quarter of these savings will come from cutting services or reducing personal budgets for those people who receive care and support[9].

12. Providers are already questioning the viability of delivering services commissioned on very low fees. Underpinning this are wide disparities in how services across the country are likely to be affected. Further cuts in budgets are likely to impact on those services where fees are lowest (e.g. some areas of the north east, north west). Local authority contracts must be funded to reflect the real costs and true market level.

13. The adult social care market is fragile with high quality service providers leaving the care market, citing financial pressure for doing so. A stable market requires good management, with the costs of procurement and regulation controlled. Fees paid to providers must be set at a level that will enable people using services to have their needs met through the provision of high quality services. Without adequate funding voluntary organisations will exit the market causing further market instability and negatively impacting on the lives of the many people who use their services.

14. ADASS[10] report that in 2015/16 65% of local authorities had at least one provider failure affecting the care and support for 7,000 people. The report adds that 59 local authorities have had contracts handed back for domiciliary care with 32 contracts handed back for residential care.

15. In 2015 the Local Government Association introduced a National procurement strategy for social care[11] to support local authorities with their duties under the Care Act (2014). VODG members report that there remains a wide variation in the procurement practices of local authorities.

16. Providers are concerned that procurement is contract or price driven, rather than strategic and focused on the quality of care. VODG members report that the ongoing financial squeeze, coupled with policy changes (e.g. implementation of the national living wage, pensions auto-enrolment, a full cost recovery model for the Care Quality Commission) have all heavily added to the costs of provision. As local authorities continually embark on costly retendering and price-reduction negotiations we are seriously concerned about the risks to quality and safety.

17. Furthermore, these financial constraints are stifling innovation, often pioneered by not for profit providers and welcomed by commissioners (see box 1 for an example on technology). The benefits that these solutions provide to individual users of services and the wider community will be more difficult to realise without sufficient investment in the sector. The dilemma around mainstreaming technological developments is that it requires significant up-front investment, which can generate long-term savings, for instance by reducing someone’s reliance on paid staff. But local authorities rarely commission these technological solutions. VODG has called on local authorities to commission services based on outcomes rather than fixed hourly rates[12]. This would give providers the confidence to invest in technologies that can simultaneously improve quality of life and reduce long-term care costs.

Box 1.

18. Providers report that there are still inconsistencies in the way that eligibility criteria are applied by differing local authorities, despite the aims of the Care Act. In particular, the funding cuts mean that local authorities are applying eligibility criteria more rigorously with the focus on those with the most complex needs. This means that fewer disabled people are eligible for services. There is concern that unmet need is increasing, mainly affecting people with moderate needs that will have long-term consequences.

19. Providers are concerned about issues with NHS continuing healthcare funding, which is causing distress and uncertainty for people who use services. People describe delays in being assessed and uncertainty in determining what is social care or healthcare. This has been exacerbated by the financial difficulties in the NHS when faced with the combination of an ageing population with complex health needs and increasingly expensive care packages.

20. The Local Government Association and Association of Directors of Adult Social Services estimate a £4.3 billion funding gap in adult social care by the end of the decade[14]. A key message from providers is the real tension they experience between delivering high quality of care in a sustainable way at a price that is affordable for commissioners. Providers are increasingly concerned that this will lead to the closure of services, especially where they become financially unviable. For some services this is a pressing situation as difficult decisions are made about allocation and use of limited resources on a day-by-day basis.

21. The continued squeeze on fees for services is leading to an ever widening gulf between the real costs of delivering services and that which commissioners are prepared, or able, to pay for. Insufficient funding is seeing fragmented social care markets, and councils struggling to manage the market.

22. It is also important to recognise that the national picture can disguise marked regional differences in the ways in which funding cuts have fallen[15]. These differences include local authorities’ readiness to implement the Care Act[16] and local outcomes for disabled people[17] which all vary considerably across England. The risk is that, not only is the market becoming increasingly unstable and is at risk of collapse, but that inequality is increasing.

Workforce issues

23. Skills for Care (SfC) estimate that 1.2 million people work in direct care roles in England[18], with some 60,000 vacancies at any one time. Turnover is also an issue with an overall turnover rate of 25.4%, although this differs by organisation and region. Providers report many reasons for challenges in the recruitment and retention of staff. A key aspect is the increasing complexity of the needs of people who use services. This means that social care work is becoming more skilled and specialised, in an industry that is still relatively low paid.

24. The negative media representations of the care sector are perceived as a further barrier to those seeking employment, particularly with regards to the low status given to it. A report from Bournemouth University[19] suggests that

25. “At a national level, more needs to be done to value those who work in the care sector by highlighting the benefits and rewards of care sector employment and not just the negative aspects of this type of work. Raising the status of the care sector through the provision of career progression pathways, clear qualification requirements, and enhanced pay levels would help to inspire future workers to join the sector”.

26. Recruitment and retention issues are further compounded by the demographic demands identified earlier. A 2015 report from the Centre for Workforce Intelligence[20] estimates that the workforce will need to increase by 41% over the next 20 years to meet increasing demand from people with disabilities. This increases to 51% for people with a learning disability.

27. The NMDS-SC[21] workforce age profile shows that 40% of the workforce is aged between 26 and 45, with 46% of the workforce is aged between 46 and 65. Older age range is a significant risk for providers as people move close to retirement and fewer younger people, with the proportion of those under 25 at 10%.

28. There are a number of government policy led human resource changes being implemented and absorbed by providers. These changes are being made with little, if any, increase in fees. For example, ADASS[22] report that the introduction of the national living wage will cost around £520m (plus at least £92m in further regulatory costs associated to the national minimum wage). “This is clearly in excess of the precept receipts of £380m so cannot reasonably be claimed to have been fully funded by government.”

29. The impact of these changes is significant for VODG members and there is some concern as to how the cost of the changes will be met. The introduction of a national living wage across all low pay sectors is flattening out the differential that many providers have sought to achieve to make social care an attractive career of choice. Similarly, higher pay to reflect senior frontline skills, or for working unsocial hours, will become challenging for providers to achieve, unless sufficient funding is used to fully support the living wage and an appropriate differential.

30. There is concern amongst providers about the instability that may result from the decision for Britain to leave the EU. There are an estimated 80,000 EU migrants filing 6%[23] of jobs in the social care in England.

31. The long-term implications of the Brexit vote on the workforce have yet to be addressed. This has been expressed in the media as potentially causing a staffing crisis by reducing supply of workers willing to take on these jobs. This has been expressed in the media as potentially causing a staffing crisis by reducing supply of workers willing to take on these jobs. A situation that is likely to compound the recruitment and retention issues for providers. A VODG report on the impact of Brexit[24] provides a more detailed discussion of the likely implications of this.

32. VODG members are alert to the issues of workforce retention and future supply in that uncertainty within the labour market following the result could reduce providers’ abilities to recruit in the short term. In the longer term there are broader workforce planning requirements to ensure an adequate pool of skilled and caring staff in the future. VODG has published a more detailed report that identifies ways that organisations can rise to these workforce challenges[25].

Policy, regulation and legislation

33. The key policy change that VODG members are working with is the Care Act. An analysis of its impact has led to questions as to whether the Act is being delivered by local authorities within current resources. Evidence from VODG members providers is that the financial pressures are preventing the effective implementation of the Act, which is having significant impact on users of their services. Examples are described below.

34. The legal entitlement to advocacy is very limited and local authorities are failing to meet the needs of many people who would benefit from this type of support. Community Care[26] identifies issues of access to advocacy as a result of limited strategic planning by commissioners to engage advocacy providers to meet local needs.

35. An independent advocate was arranged for only 11,000 people according to the Local Government Association and the Association of Directors of Adult Social Services quarterly stocktake (in November 2015), representing just 2% of people assessed and eligible for care[27]. The government’s impact assessment estimated 7% would qualify for support.

36. Providers have found that some local authority social workers/assessors make visits to individuals without inviting family members to be present or having a representative of the service provider there. This leads to misunderstanding and misleading information if the person is not fully able to advocate for themselves.

37. Some local authorities seem to have adopted a policy to set an upper limit for funding, above which they not fund a package of care. This means that the individual using care and support services is expected to pay the difference or seek funding from a third party. One provider told us that the assessors can seem ignorant of what it means to have specific disabilities and needs, for example the need for specialist training in rehabilitation for support staff, or the wish to make use of assistive technology to continue living independently.

38. Other local authorities have adapted a policy of fair and affordable care. This approach only funds packages of care that represent best value to the commissioners, without consideration of the individual’s preferences and choice. Again, this presents a risk to the person’s wellbeing as well as ignoring longer-term implications.

39. Providers report that commissioners are reducing the support hours available to people to do things that local authorities have funded in the past. For example, to enable people to access medical appointments or to cook a meal. These cuts in funding create a significant risk to disabled people’s independence and wellbeing. It appears that financial considerations are the overriding factor with no understanding of the long-term implications of failing to meet these needs. This thinking is short term and fails to consider the longer term costs both for individual and the local authority or NHS.

40. Additionally, stress is being caused to individuals because of issues with their direct payments. The application of rules by local authorities on how these can be used is very confusing and administration arrangements vary. This is contrary to the rhetoric of choice and personalisation.

41. Whilst providers understand that there are limited resources available to meet people’s care and support needs, the Care Act aims to ensure consistent practice across all local authorities. The evidence of VODG members is that there is as much inconsistency now as previously under the community care legislation.

42. However, the greatest concern is the impact of these types of funding policy on the health and wellbeing of the people who require care and support services. The Care Act is based on principles (and statutory guidance) of promoting personalisation, choice, independent living and market shaping with providers as partners in the provision of care. VODG has found limited evidence of these principles being enacted in some areas of local authority commissioning.

Conclusion

43. One of the impacts of the recent changes in Government policy and legislation is that providers are in constant state of flux to change their ways of working. Providers are alert to the need for continuous improvement and have the capacity for change. However, recent policy and regulatory developments mean that there is a risk that they will experience initiative overload and be unable to deal with all that is expected of them.

44. The changes in human resource factors, such as the national living wage, have led to increased costs for providers to meet these changing requirements. Many of these costs have been absorbed by the providers but this is not a sustainable solution for future years. In addition a less obvious cost to VODG members are the hidden costs of negotiating with commissioners and often re-tendering for contracts.

45. A further risk is around distraction following the decision to leave the European Union and the raft of domestic issues that voluntary disability organisations urgently need Government and policy makers to address.

46. A sustainable funding settlement for the sector will enable disability organisations to invest in their people – to further build careers in the sector, to recruit and retain the right staff and to pay the workforce at a rate that recognises the value of the work they do in society. The national minimum wage and national living wage must be properly funded.

47. The Chancellor’s 2016 budget announcement, delivered on 16 March, paid little reference to the social care sector. At the time VODG said, “the absence of social care was an obvious and concerning void...” Following the EU referendum vote of 23 June, the risk is that the same could be said again.

48. VODG is happy to prepare further briefing, address questions and attend witness sessions.

VODG (Voluntary Organisations Disability Group)

www.vodg.org.uk | [email protected] | @VODGmembership

[1] Think Local, Act Personal www.thinklocalactpersonal.org.uk/

[2] HM Parliament, Communities and Local Government Select Committee www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/news-parliament-2015/adult-social-care-launch-16-17/

[3] VODG list of members. Accessed: www.vodg.org.uk/members/list-of-vodg-members.html

[4] Department for Work and Pensions (2015) Family resources survey. Accessed: www.gov.uk/government/uploads/system/uploads/attachment_data/file/437481/family-resources-survey-2013-14.pdf

[5] Centre for Disability Studies (2012) Estimating the need for social care services for adults with disabilities in England 2012-2030. Lancaster: University of Lancaster.

[6]School for Social Care Research (2012) The role of the third sector in delivering social care. Accessed: www.lse.ac.uk/LSEHealthAndSocialCare/pdf/SSCR-Scoping-Review_2_web.pdf

[7] National Council for Voluntary Organisations (2015) A financial sustainability review. Change and adaption in the voluntary sector as the economy recovers. Accessed:  www.ncvo.org.uk/images/documents/policy_and_research/funding/financial-sustainability-review-of-the-voluntary-sector-july-2015.pdf

[8] Association of Directors of Adult Services (ADASS 2016) ADASS budget survey 2016. Accessed www.adass.org.uk/budget-survey-2016/

[9] Association of Directors of Adult Services (ADASS 2016) ADASS budget survey 2016. Accessed www.adass.org.uk/budget-survey-2016/

[10] Association of Directors of Adult Services (ADASS 2016) ADASS budget survey 2016. Accessed www.adass.org.uk/budget-survey-2016/

[11] Local Government Association (LGA 2015) Social care. Accessed: http://lg-procurement.org.uk/health-and-social-care

[12] VODG (2016) Technology is changing the way we live. Can it also transform the way we deliver adult social care? Accessed www.vodg.org.uk/uploads/pdfs/2016%20VODG%20technology.pdf

[13] VODG (2016) Technology is changing the way we live. Can it also transform the way we deliver adult social care? Accessed www.vodg.org.uk/uploads/pdfs/2016%20VODG%20technology.pdf

[14] Local Government Association and Association of Directors of Adult Social Services (2014) Adult social care funding: 2014 state of the nation report. Accessed: www.local.gov.uk/documents/10180/5854661/Adult+social+care+funding+2014+state+of+the+nation+report/e32866fa-d512-4e77-9961-8861d2d93238

[15] Nuffield Foundation and Institute for Fiscal Studies (2015) Central cuts, local decision-making: Changes in local government spending and revenues in England, 2009-10 to 2014-15. Accessed: http://election2015.ifs.org.uk/uploads/publications/bns/BN166.pdf

[16] Local Government Association (2015) Care Act implementation. Results of local authority stocktake 4. Accessed: www.local.gov.uk/documents/10180/6869714/2015-08-11+Stocktake+4+Full+Tables+%28Final%29.pdf/f9826461-aaf1-4c86-b5aa-994d2046e80c

[17] Health & Social Care Information Centre (2015) Adult social care outcomes. Accessed: http://ascof.hscic.gov.uk

[18] Skills for Care (SfC 2016) The size and structure of the adult social care sector and workforce in England, 2016. Accessed: www.nmds-sc-online.org.uk/Get.aspx?id=971293

[19] Bournemouth University (2015) Pathways to recruitment: perceptions of employment in the health and social care sector. Accessed: www.ncpqsw.com/publications/pathways-to-recruitment/

[20] Centre for Workforce Intelligence (CfWI 2015) Forecasting the adult social care workforce to 2035. Accessed: www.cfwi.org.uk/publications/forecasting-the-adult-social-care-workforce-to-2035-workforce-intelligence-report/@@publication-detail

[21] NMDS-SC data. Accessed: www.nmds-sc-online.org.uk/reportengine/GuestDashboard.aspx?type=AgeBand

[22] Association of Directors of Adult Services (ADASS 2016) ADASS budget survey 2016. Accessed www.adass.org.uk/budget-survey-2016/

[23] NMDS-SC data. Accessed: www.nmds-sc-online.org.uk/reportengine/GuestDashboard.aspx?type=AgeBand

[24]  VODG (2016) Post-Brexit: What next for voluntary sector disability organisations? Accessed: www.vodg.org.uk/news/476/111/A-focus-on-the-future-new-VODG-report-on-the-impact-of-Brexit.html

[25] VODG (2016) How do disability organisations recruit, retain and develop the right workforce? Accessed: www.vodg.org.uk/news/467/111/VODG-launch-Thought-Leadership-report-rising-to-the-social-care-workforce-challenge.html

[26] Community Care (2015) Care Act advocacy referrals ‘way below’ expected level. Accessed: www.communitycare.co.uk/2015/11/18/care-act-advocacy-referrals-way-expected-level/

[27] Local Government Association (2015) Care Act stocktake. Accessed: http://www.local.gov.uk/care-support-reform/-/journal_content/56/10180/6341378/ARTICLE