"The case had everything – big bucks, the government and people in need. All that was missing was a dame. 'I'll take it,' I said. It was going to be my best case yet."
The conversation between Bert Provan, former head of Supporting People at the ODPM, and Eugene Sullivan, the consultant commissioned to investigate why the budget for Supporting People rose from the £1.4bn cost estimate in February last year to the £1.8bn final grant in October, probably did not go quite like that. But the gist was the same: did care services really need to be that expensive? Why did costs vary so much across the country?
Sullivan was commissioned in October and the results of his sleuthing were published last week, along with a recommendation that next year's Supporting People budget be cut by £15m, with councils expected to save an extra £45m. He deemed the total £1.8bn grant that had been paid out by October 2003 to be, as the ODPM had suspected, more than was needed to run the existing supported housing services.
His chief suspects for the discrepancy were:
- services funded by the pot that no longer met the need they were created to fulfil
- new schemes created during the Klondike goldrush before the funding pot was fixed that were also of "doubtful strategic relevance"
- schemes previously funded by social services, housing or health – rather than through the part of housing benefit that Supporting People replaced – that had been moved into the Supporting People pot. Supporting People was only intended to fund housing-related support not high-level care, which is often expensive
- a lack of competitive pressure on prices – schemes were priced according to cost
- very low unit costs in some councils, raising questions about the quality of the schemes
- very high unit costs in some other authorities, which raised questions about whether the service was paying for more than just housing-related support, and whether the service was good value for money.
Sullivan was unwilling to point the finger at one of these as the ultimate cause although he identified about 30 authorities that stood out – for a variety of reasons, but mainly their unit costs. This group had almost a third of the national Supporting People grant and six of them made up £70m of the £400m discrepancy. He recommended some of them be inspected to find out why their costs were so high.
The drive of Sullivan's review was that the sector needed to change so services fitted need and pricing became competitive. However, he was clear that the pace of change should not jeopardise the smallest service providers and vulnerable people, particularly "unpopular" groups such as drug users. Speedy but careful change was needed. Sullivan said: "The launch provision has to be liberated more quickly than over three years. I feel £1.8bn is too much to be tied up for so long when there are other needs to be met."
The ODPM takes action
His detective work done, it was time for the ODPM to move in. Its prescription to bring the fund under control was a small reduction in the grant and for local authorities to save 2.5% – or about £45m – of the grant, although no single council will have to save more than £800,000. More than half of the money saved will go to schemes that came on line in 2003/4 but did not have full Supporting People funds.
In addition, the reviews process will be accelerated with some of the big spenders – and some more middle-spending councils for comparison – getting a visit from the Audit Commission before the autumn. The government will also consider inspecting groups of services that cater for similar clients in order to compare costs and schemes. It will offer extra help – the figure is yet to be set – to help councils run Supporting People. All the intelligence gathered will feed into the government's spending review.
The report says nothing about capital; we still need to know how it will be commissioned in the future
clare tickell, chief executive, Stonham Housing Association
Care providers are sanguine about the results. After all, £15m is a small cut from a budget of just over £1.8bn. But the idea of councils being forced to save money makes service providers nervous, especially because the grant has not gone up to take account of inflation. The change could mean service cutbacks but, if managed carefully, may have little impact on the majority of services.
Chris Hampson, head of policy and strategy at Look Ahead Housing and Care, explains: "If some pass this saving onto providers, they would need to cut costs and it would cause significant problems. However, a lot of councils transferred schemes from social services to Supporting People. Now the responsibility of funding those schemes will go back to social services. If that money goes back into the Supporting People pot they can easily make a saving, so won't have to make significant cuts in other services. The problem will be for social services departments if they have already spent that money." Overall, it looks like the savings process is unlikely to be painless.
This belt-tightening is set to continue in future. The pot seems unlikely to balloon further and new services will have to be paid for from a capped pot.
Questions remain
Although the ODPM has listened to the sector's worries about new schemes that had inadequate Supporting People funds, a question remains over how new schemes will be funded in future. The Housing Corporation only wants to give funding to build schemes if they have guaranteed Supporting People funding to run them. Someone, perhaps local authorities or regional housing boards, needs to take responsibility for coordinating the two funds, providers say.
Clare Tickell, chief executive of Stonham Housing Association, says: "The report says nothing about capital. We still need to know how it will be commissioned and built in the future." It seems certain that new services will only be created by saving money from existing schemes. What is yet to be revealed is whether individual authorities will take responsibility for this or whether the ODPM will wade in and instruct authorities to save a given amount.
Further change will be around the corner in the coming years. Sullivan made several other recommendations that have not yet been implemented by government but, given the government's agreement with his aims, these changes could still be on the cards.
Sullivan suggested that other departments, such as health and social services, could contribute to care packages, which include the kind of support usually paid for by them. Terrie Alafat, head of the ODPM's homelessness directorate, denied that such a move would be a return to the pre-Supporting People world of myriad funding streams.
The recommendation could provide pause for thought for the Home Office and other departments that benefit from Supporting People as they approach the spending review. Perhaps they might put in some money – surely good news for service providers. Sullivan also suggested a funding formula that sets maximum rates for different kinds of services and allocates funds according to need, population and cost.
Source
Housing Today
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