INDEPENDENT FUNDING REVIEW OF FREE PERSONAL AND NURSING CARE: MEETING ON MONDAY 7 JANUARY 2008, ST ANDREW'S HOUSE: NOTE OF POINTS OFFERED BY SOLACE, CIPFA, ADSW WORKING GROUP.
Present: Lord Sutherland (Chairman)
Anne Jarvie
Mary Marshall
Jim Dickie
Professor David Bell
Rhona Dubery (Secretary)
Alex Linkston, Chief Executive, West Lothian Council and Treasurer, SOLACE (Scotland)
Sue Brace, City of Edinburgh Council and Convenor ADSW Standing Committee for Community Care.
Charles Armstrong, Director of Finance, Aberdeenshire Council and CIPFA Directors of Finance.
Lesley Stevenson, Policy & Research Officer SOLACE (Scotland)
In Attendance: Shaun Eales, Scottish Government: Community Care Division
Introductory Remarks
1. Lord Sutherland welcomed the representatives of the SOLACE, CIPFA, ADSW working group to the specially convened meeting and thanked the group for its letter of 21 November giving a broad indication of its concerns about the funding and sustainability of the FPC policy and for the written submission expanding on these points. He invited working group members to talk the Review Group though its submission which had been tabled that morning.
2. By way of introduction Mr Linkston said that the 3 local government professional associations very much welcomed the independent review and the heightened profile it brought to the issue of funding of FPNC. He said that before getting to the detailed concerns he wanted to make the following general points:
¨ FPNC needed to be delivered within a finite overall level of resources made available to Scottish local authorities. Where they required to spend more, councils' only recourse was to fund the difference from Council Tax;
¨ Current funding was allocated through the GAE mechanism, which represented a provision to spend, rather than actual funding;
¨ Resources for FPNC sat within social work budgets, which were probably the most hard pressed of LA budget, which councils already had difficulties balancing. However, they were required to do so in law;
¨ The new Concordat and partnership arrangements between the SG and COSLA also signed councils up for efficiency savings of 2% per annum, albeit that they would be able to retain these to re-deploy against pressures;
¨ FPNC was vitally important to people's quality of life and the move to outcome agreements under the Concordat was likely to emphasise that perception publicly; and
¨ No provision for demographic change had been allowed for in the 2008-09 - 2010-11 finance settlement.
SOLACE, CIPFA, ADSW Submission
3. In discussion the following points were made/concerns were raised by members of the SOLACE, CIPFA, ADSW working group:
Inequalities
(a) There were 3 main areas of inequality:
¨ Funding ceiling. The existence of a funding ceiling for those in care and no funding ceiling for those receiving care at home was patently inequitable. It did not sit well with the original principle of a universal entitlement and over time, the fact that there was no limit to the amount of FPNC a person could receive at home was having a significant impact on budgets;
¨ Attendance Allowance. The fact that those receiving care at home still received the DWP allowance, when those in care did not was unfair and could be further compounded as the award of AA often triggered entitlement to other benefits. That inequality could be quite striking when the figures were applied to it, with some older people receiving care at home and making no contribution to that care being allowed to retain all their disposable income, amounting to £232 per week, when some receiving care in a residential home were left with as little as £20.45 per week; and
¨ Two-tier system. FPNC had helped create a 2-tier system where people with higher levels of income had benefited most and where those with "moderate" wealth, who were at, or just below, the rising eligibility criteria thresholds had gained the least or had actually suffered through councils' withdrawal from preventative home care services.
Legislation
(b) Key amongst concerns which may require recourse to further legislation were:
¨ Universal Policy? The fundamental issue of whether FPNC was intended as a universal entitlement and as such a demand-led policy or whether councils were entitled to apply discretion and ration services within finite resources was paramount. Councils operating on the latter assumption were managing demand through waiting lists or eligibility criteria and that was fuelling inequity and confusion;
¨ Food Preparation. The issue of the extent to which local authorities could charge for food preparation remained unresolved and it was felt that re-interpretation of the current legislation and guidance would not be good enough in providing the clarity required.
Funding
(c) There were 2 key points on funding:
¨ Relationship between GAE and actual costs of the policy. The distinction between government funding for FPNC delivered via GAE assessments and AEF (total grant allocations) should be remembered; AEF now being the lower figure; and
¨ Overall picture on funding of FPNC policy. FPNC was fully funded from implementation until 2005-06 when it was estimated that there was a funding shortfall of around £13m. By 2006-07 the *shortfall had increased to £26m and the demographics meant the funding gap would grow substantially in coming years if left unchecked. The work which Audit Scotland was doing to up-date/revise the expenditure data from local authorities was acknowledged; as was the fact that the exercise might offer a more accurate picture of actual expenditure and any funding gap.
[ *Secretary's note: The attached Appendix sets out the detailed calculation of the suggested mis-match between spend on FPNC and grant support. This was submitted to the Review group on 11 January 2008]
Sustainability
(d) On sustainability of the FPNC policy and future costs:
¨ Sustainability of funding for older people was a general concern but was particularly acute for FPNC where 2 factors were at play with the demographic trends:
- increasing numbers of people would require FPNC in the future and those people would require it for longer periods of time; and
- projected increases were particularly marked in the over 85s, who required the most resource-intensive care packages;
¨ The extremely tight financial context for the 3 years 2008-09 to 2010-11 would make it all the more important that local authorities thought about the delivery of FPNC within the context of their overall available resources. This would be heightened with the move to an outcomes framework, pushing councils to consider need increasingly from a quality of life perspective.
¨ The 2008-11 Finance Settlement and the outcomes-based funding arrangement which under-pinned it, would make it increasingly difficult to track the cost of the policy in the future.
Opportunities/Ideas on Way Forward
(e) A number of possible solutions/ideas to address difficulties associated with the policy, such as the alleged funding shortfall and use of various tools to manage demand, such as eligibility criteria and waiting lists, were offered for consideration by the Review group:
¨ Funding Ceilings. The funding anomalies within the policy (inequality between those receiving FPC at home and those receiving in a care home) needed to be addressed and one way of doing that would be to introduce a standard funding ceiling for those supported at home. As it stood, inequalities were compounded by the fact that those at home also still received Attendance Allowance when those in care homes did not (after the first 4 weeks in care). Alternatively, to address the inequity you could remove the cap on FPNC in care homes or look to those who could afford to pay, to contribute something to the costs of their personal care. That would obviously involve a particular assessment process. However, assessment of need was still an essential part of the system and the process could be extended to consider ability to pay without involving a great deal of additional cost;
¨ Resource Transfer. Although the need for resources to follow clients was a recommendation in the Kerr Report, resources were invariably not following clients moving from an acute care to a social care setting. In view of the demographic projections and shifting balance of care, the scope to establish a formal system of resource transfer needed to be re-examined;
The ageing population also raised the question of whether there was scope to shift resources within the Scottish Block from areas where demand was declining in line with the demographics;
¨ Means Testing. Although a means test would be unpalatable to many - especially if the Review concluded that FPC should be provided on a "universal" basis, rather than a targeted basis - the reality of what was affordable long-term may make it legitimate to re-visit the use of finite resources and question who was currently benefiting and whether some contribution should not be made toward their care from those who could afford it;
¨ Housing Benefit Model. If FPC was intended to be a "universal" entitlement for all those assessed as requiring it and operated as a needs based and demand-led service, it put it on a footing with provisions like Housing Benefit and the option of moving to that model of funding could be considered. i.e. local authorities would remain the delivery agents but would effectively invoice central government for the costs. This would address the "rationing" and "postcode lottery" problems.
Further Comments Offered
4. In discussion of the submission and further comments offered by the SOLACE, CIPFA, ADSW working group the following points were made:
(a) Outcome based funding arrangements. The move to outcomes agreements from 2008-09 on-wards presented huge challenges but also presented tremendous opportunities. Initial outcome agreements would be with each of the 32 councils but were likely to extend to agreements with Community Planning Partnerships in the longer term, which had even greater benefits, allowing a much more holistic approach to service provision. Single Outcome Agreements would be based on the national outcomes but councils would have the freedom to set local outcomes to take account of local priorities. However, one key concern in the agreement reached was the fact that the demographics had not been factored into the 3-year settlement and the growing elderly population would make it increasingly difficult for councils to deliver on their agreed outcomes relating to care for the elderly;
(b) Public expectation of service. The move to outcomes based funding (and the removal of most ring-funding) gave local authorities much greater discretion to determine their own spending priorities than ever before but did not remove the political reality around those spending decisions and the fact that children's services were always likely to be favoured when it came to setting social work budgets. It was against that sort of background that 32 different takes on the provision of FPC had emerged and the use of waiting lists and eligibility criteria had grown to varying degrees across the country. Yet, public expectation seemed to be of a universal entitlement for all those assessed as in need. High expectations were likely to be a feature in coming years as the older cohort became populated by a more informed, and vocal generation, who were used to high levels of service in other aspects of their lives and more likely to challenge what they considered to be poor service;
(c) Local variations in cost of provision and no's receiving FPNC. Some of the cost variations apparent (at individual local authority level) in the evidence the review group had received could be explained by the historic provision in each different area. Other possible factors included the raft of changes there had been in social work services in recent years and different means of delivery and the extent to which a council may have elected to adopt new technology in meeting client's needs, e.g. tele-care for the home based elderly, which was not evident in LFRs; and
(d) Existing funding shortfall. The working group would supply details of the calculations behind the shortfall figure of £26m it estimated was apparent in 2006-07 [now attached as Appendix below]; but it acknowledged that the Audit Scotland detailed financial analysis was likely to provide a more definitive estimate of costs (as it would for the first time attempt to address some of the inconsistencies which had been apparent in the LFR monitoring returns) and reserved the right to review its shortfall calculations in the light of those figures when the Audit Scotland Review published at the end of the month;
APPENDIX
Independent Funding Review of Free Personal & Nursing Care
Secretariat
11 January 2008