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Nottinghamshire County Council expecting £33m budget black hole

today6 July 2022 5

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New Government reforms into the cost of adult social care are expected to leave Nottinghamshire County Council with a budget black hole of almost £33 million.

The authority is raising concerns directly with the Government about the impact on its finances, saying funding support from Whitehall is unlikely to be “sufficient” to meet the reform’s objectives.

The wide-ranging reforms, due to be brought in from next year, include an £86,000 cap on the cost of social care during anyone’s lifetime.

A large uplift in the price local authorities pay to home and care agencies is also planned.

Councils across the country are now assessing what the impacts will be on their individual finances – and Nottinghamshire County Council is concerned its costs will be too big to bear.

A report due before the council’s cabinet meeting next week says the changes to care fees could cause the largest burden on the authority, with a multi-million-pound rise in the amount the council must pay out after the changes.

The increases come through the Government’s Fair Cost of Care reform.

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Analysis by the UK Care Home Association (UKCHA) suggests the rate for care should increase by between 17.5 and 19 per cent, equating to £23.50 per hour for care services.

The county council’s most recent cost for care services average was £18.57 per hour in 2021, meaning the reform could lead to an hourly rate increase of almost £5 for care commissioned by the council.

Council reports say, in a worst-case scenario, the reform could lead to extra spending of £18m to care homes and £23.57m to home care services in the county every year.

The £23.57m for home care includes spending for supported living providers, day service providers and personal assistants, with costs expected to increase in these areas to prevent destabilising the wider market.

However, the authority expects to receive just £8.82m from the Government in supported grants, leaving what the council describes as a “significant shortfall” of £32.75m.

This is based on the council receiving 1.47 per cent of the national funding pot of £600m in each of 2023/24 and 2024/25, having received a similar percentage this financial year.

In the report, Melanie Brooks, corporate director for adult social care, says the council has written to the Government to raise concerns about the “issues and risks” of the reforms but received “little assurance”.

She believes the reforms are unlikely to be achieved unless further financial support is provided by Whitehall.

She said: “There is a risk that the two main policy objectives of the Fair Cost of Care cannot be realised in full within the budget envelope and the timetable set out in the Department of Health and Social Care policy paper.

“It is therefore difficult to see how Nottinghamshire’s share of the £1.4bn attributed to the delivery of this policy over the next three years will be sufficient to meet the stated objectives for the Fair Cost of Care reform.”

She added: “The council expressed its concerns in a letter to Sir Chris Wormald, permanent secretary at the department of health and social care, about the risks associated with the fair price for care deliverables and social care assurance.

“In response [the Government] has provided little assurance around the affordability of the changes or flexibility in terms of the tight deadlines the department is working towards.”

Councillor Matt Barney (Con), portfolio holder for adult social care, has also raised concerns about his own Government’s social care reforms.

He says the authority will work with neighbouring upper-tier and unitary councils to “reduce duplication and costs”, with the Fair Cost of Care reform expected to cost East Midlands authorities as much as £802 million over the coming decade.

He said: “These reforms present a significant challenge to local authorities across the country.

“We have a difficult road ahead. We want to continue to support people to live independent and healthy lives in Nottinghamshire.

“So, we are prioritising adult social care reform and working with other local authorities to reduce duplication and costs.

“We have also expressed our concerns to the Government and will continue to lobby ministers for funding and support to deliver these reforms.”

The £86,000 means-tested spend cap on care is also expected to cost East Midlands councils between £614m and £743m between now and 2032, the documents add.

And analysis from the County Council Network estimates 221 care workers and 45 financial assessors will be needed across the region to carry out assessments, reviews and care management.

Other reforms due to be implemented in the coming decade include councils having to evidence compliance to the Care Act within their own adult social care departments to watchdog the Care Quality Commission (CQC).

The county council says it is currently unable to forecast how much the “burden” of CQC inspections will cost once the change is brought in from 2023 onwards.

The Government has also announced a ‘Build Back Better’ scheme to improve systems within care, which will include training for “new models of care” for council staff and the 22,000 people who work in social care countywide.

A Department for Health and Social Care spokesperson did not comment specifically on the county council’s concerns when contacted by the Local Democracy Reporting Service.

However, they said: “Reforming adult social care is a priority and we are investing £5.4bn over the next three years to end spiralling care costs and support the workforce.

“This includes £3.6 billion to reform the social care charging system and enable all local authorities to move towards paying providers a fair cost of care, and a further £1.7 billion to begin major improvements across adult social care in England, funded by the Health and Social Care Levy.

“Our investment via the levy is on top of record annual funding to help councils respond to rising demands and cost pressures.”

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