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Money Matters After All


The ‘personalisation agenda’, as it is sometimes known, can be traced to the campaign for independent living which rallied against the corralling of ‘disabled’ people in demeaning and dehumanising institutional care, suggesting that the same money would be better spent supporting people to lead full lives as active participants in local communities. The campaign led to new treaty rights, such as Article 19 of the Universal Nations Convention on the Rights of Persons with Disabilities (CRPD), and indirectly to a wide range of specific legal rights in different countries. In the UK it found influence with the Conservative government which ushered in the NHS and Community Care Act 1990 and later the Community Care (Direct Payments) Act 1996, and also with the New Labour government that followed.


One piece ground common to both the Conservative and New Labour strategies of the 1990s and early 2000s was allocating social care budgets to individual service users, rather than to social care providers. The conviction was that this would allow people to make individualised choices based on what worked for them, resulting in greater social integration at no extra cost. The problem was that at this point, there was no evidence that this would actually work. In 2006 the government began a sequence of pilot studies of personal budgets, on this occasion evaluated by the respected Social Policy Research Unit at the University of York. Known as IBSEN, Chapter 6 of the final report contained the ‘green light’ that enthusiasts had been hoping for: using individual budgets did make a positive difference for most people – although crucially in most cases the cost and value of the services purchased also rose.


Following the publication of IBSEN in 2008 the Department of Health issued guidance requiring all Local Authorities to implement personal budgets with all adult care groups by April 2011. Had they read on to Chapter 7 of the IBSEN report their response might have been different. The discussion section asks “Are the outcome gains that we charted in Chapter 6, modest as they are, worth the cost of achieving them?” and concludes “The findings are (cautiously) encouraging for the introduction of [individual budgets for most care groups] … As far as older people are concerned however, there is no evidence of cost-effectiveness from this pilot.” [My bold, p.122] Strange, then, that the Transforming Social Care strategy did not start with the care groups for whom the evidence was less equivocal (mental health and physical disability), whilst the approach for older adults was redeveloped and re-tested. Or perhaps not so strange.

These days we are familiar with the phrase 'demographic time-bomb', but even in 2008 policy makers were well aware of the impact that an ageing population would eventually have on the adult social care budgets. By introducing individual budgets, local and national politicians may have been attempting to divest themselves of the millstone of accountability for a system that was unsustainable and about to implode. More generously, they may have been trying to move to a new system of eligibility where entitlement to services could be ‘dialled down’ incrementally without leading to sudden and unpredictable failures amongst key support providers. I was there and I certainly heard both arguments, but I cannot vouch for how influential they were. However, I do know that people were seriously worried, and personal budgets potentially offered a way out - if they could be made to work.


Figure 1: Cost of adult social care in England (£ billion) by care group, 2007-8. Figures from Department of Health (2009)


2008 figures for Local Authority spending on social care for adults aged 65 or over topped £9 billion. This was about 60% of the total spend, equivalent to about 10% of the budget for the NHS. In 2010 the Office for National Statistics predicted that by 2035 the numbers of people of pensionable age will have increased from 12.2 to 15.6 million. In the same period the population aged 80 or over – the most expensive fraction in terms of social care costs – is expected to increase from 1.9 million to 5.9 million. Even without a degree in social statistics, it’s easy to see which way the wind was blowing. And remember that the Transforming Social Care process started before the financial crisis of 2008, d its effect on public service budgets.


Being a man of a certain age, I can remember the economic crisis of the early 90s – the one that led up to ‘Black Wednesday’, when Britain was ignominiously dumped out of the European Exchange Rate Mechanism (ERM), partly as a result of the actions of currency speculators. The willingness of speculators to break the economies of vulnerable nations isn’t the only think that hasn’t changed. At the time I had the dubious privilege of being part of an NHS hospital ‘quality improvement group’. The purpose of the group, as far as I could see, was to offset the cuts we were making to services by dreaming up new ideas for how we could improve things in other, cost-neutral ways. It didn't seem to matter if they were hpopelessly unrealistic, as long as they gave some hope. To be fair to my former colleagues everyone gave it their best effort, but we probably knew it was pointless from the beginning. At the end of the day, a cut is a cut.


Figures released today show that, despite all the fancy footwork with personal budgets, fewer people are accessing or benefiting from adult social care services as a result of the cuts to social care budgets. According to Community Care magazineThe total number of people receiving adult care services in 2012-13 fell to 1.3m, down nine per cent from last year and 25 per cent from 2007-08, according to the latest social services activity figures for England.”  Perhaps unsurprisingly, the cuts are actually making things worse for people.


The picture is particularly grim for ‘independent living’: nearly all the cuts have been focussed on community-based services, which are down 10% from 2011-12, whilst residential and nursing care has remained relatively unscathed. It's interesting that at the same time as this has been going on, the proportion of people receiving support through personal budgets has increased from 43% to 53%. In other words, proportionately more people have been getting personal budgets, but the proportion of people living in institutions is also going up. So, what’s gone wrong?


As I’ve argued above, the danger signs were there from the beginning. We knew the rationale wasn’t the same for older adults as for other adult groups (for example in terms of supporting people to participate in employment), and there was no evidence of effectiveness from the pilot study. The government of the day was panicked by the demographics and then backed into a corner by the economy. It’s always tempting to imagine that ‘clever thinking’ and ‘innovation’ can lead to improvements without the need for more spending. The pressure to do so in the midst of budget cuts becomes almost irresistible, particularly for those politicians and managers who promise us something for nothing, and whom we punish severely when they fail. But resist we must. A recent review of social policy under the New Labour government found that during the good times, the improved outcomes they achieved were also clearly linked with expenditure, irrespective of the clever arguments about ‘social investment’ that were being touted at the time. It seems that in good times and the bad, the amount of money you spend really does matter, and the impact of innovative ways of moving it about is often exaggerated.


References not hyperlinked to sources.

  • Department of Health (2009) Use of Resource in Adult Social Care: A guide for local authorities. London: Department of Health.
  • Glendinning, C., Challis, D., Fernandez, J., Jacobs, S., Jones, K., Knapp, M., Manthorpe, J., Moran, N., Netten, A., Stevens, M. and Wilberforce, M. (2008) Evaluation of the Individual Budgets Pilot Programme: Final Report. York: Social Policy Research Unit, University of York.
  • Lupton, Ruth Hills, John Stewart, Kitty and Vizard, Polly (2013) Labour’s Social Policy Record: Policy, Spending and Outcomes 1997-2010. London: Centre for Analysis of Social Exclusion
  • Office for National Statistics (2010) Estimates of Centenarians in the UK, 2010. Retrieved 3/12/2012














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