Cabinet renews calls for Government to rethink social care funding

Members of Hampshire County Council’s Cabinet have renewed their calls for Government to develop a long-term national funding strategy to address the growing social care pressures impacting local authority budgets in Hampshire, and across the country

Oct 16 2019

The pressures are among the root causes of the £80 million funding gap faced by the County Council by April 2021 – which was considered by Cabinet at their meeting this week (15 October). The expected shortfall is down to rising costs and inflation, and growing demand for council services such as social care from an ageing population, and higher numbers of vulnerable children needing care.

Leader of Hampshire County Council, Councillor Keith Mans explained: “In Hampshire, we have adopted a tried and tested, and careful approach to our financial planning to date. This has involved investing savings early to deliver more efficient and cost-effective ways of working, maximising income generation opportunities, and prudently using our reserves to address funding gaps to meet one-off demand pressures. This strategy, which residents have told us they support, has allowed us to target funding to the areas it’s needed the most – protecting the most vulnerable in our communities, while safeguarding standards. In April this year, Ofsted rated Hampshire’s Children’s Services as ‘Outstanding’ – a fantastic achievement in these very challenging times.

“However, the prolonged cost pressures we face, particularly in adults’ and children’s social care services are significantly outstripping our financial forecasts. Over the next five years, we anticipate that there will be an extra 2,000 people, each year, reaching the age of 85 and over – with greater and more complex care needs. Similarly, in children’s social care, budgets cannot keep up with rising demand for child protection services, coupled with the increasing costs.

“While we welcome the fact that the expected reductions in Government funding haven’t arisen for next year at least, we have lost out on 1% of council tax income that we had already assumed in our figures, and without the extra injection of funding announced by Government in its September Spending Review, Hampshire would have faced a shortfall well in excess of £100 million by 2021/22. However, the additional money has brought us back to a broadly neutral position – but it’s just for one year.

“If we are to remain financially sustainable beyond 2021/22 and maintain high performing services which protect the most vulnerable, there needs to be a significant change in the way growth in adults’ and children’s social care is funded. It’s simply not possible to sustain that growth in demand and cost indefinitely. In recent years we have repeatedly asked Government to look again at social care funding, together with a fairer overall funding deal for shire councils such as Hampshire, and we will continue to do so. We will be making further representations to feed into Government’s three-year Spending Review due to take place next year.”

The County Council’s major cost reduction programme to 2021 is its fifth such exercise since 2010. This time, it will be even more challenging - running alongside previous transformation and efficiency savings programmes and against the backdrop of a generally more challenging financial environment and burgeoning service demands.

Councillor Mans concluded: “We have looked closely at potential opportunities to achieve the required £80 million of savings by April 2021 and unsurprisingly the exercise has been extremely difficult because savings of £480 million have already been identified over the past nine years. The sheer size of this 13% savings target, coming on top of previous reductions, requires a complete ‘re-look’; with previously discounted options and more radical changes having to be considered.”

The options for balancing the budget, approved by Cabinet, seek to maximise income generation opportunities and minimise reductions and changes to local services in line with feedback collected during a public consultation over the summer. Other options to balance the budget, include:

- continuing with the County Council’s financial strategy, which includes: 
- targeting resources on the most vulnerable adults and children
- using reserves carefully to help meet one-off demand pressures
- lobbying central Government for legislative change to enable charging for some services;
- raising Council Tax by up to 4%;
- considering further opportunities for working with other authorities in Hampshire to reduce costs.