January 9, 2013 12:03 am

London councils face adult care costs gap

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The cost of caring for London’s ageing population is swallowing up a rising proportion of council budgets and will lead to a funding gap of £907m by 2018, a report warns.

Local authorities in the capital spend about a third of their funding on adult social care but the proportion is expected to rise over the next five years as the number of over-65s rises by 50,000 between 2012 and 2017.

London Councils, a lobbying body for the city’s 33 boroughs, said councils were already saving money on social care by improving procurement and sharing services between boroughs. But even generous projections of further savings would be outweighed by the expected growth in need, it says in a report on Wednesday.

Ravi Govindia, leader of Wandsworth council and London Councils’ executive member for adult services, said: “It is clear that even if every council could implement all the efficiency changes outlined in the report the funding gap remains daunting.”

Social care and waste management are statutory services that councils are obliged by law to provide. The Local Government Association has estimated that spending on other, discretionary services such as parks and libraries will drop from £24.5bn in 2010-11 to £8.4bn in 2019/20 to accommodate the rising costs of adult care – equivalent to an 80 per cent cut in real terms.

Councils have come under intense financial pressure following the 2010 spending review, which left them with a 28 per cent cut in their grant from central government over the four-year period to 2015.

Demographic shifts were just one factor behind the increased strain on adult care, London Councils said. Another was the growing incidence of serious health conditions such as diabetes. Sarah Sturrock, interim strategic lead of health and adult services at London Councils, said: “While it’s good news that people are surviving longer, they are surviving with significant needs.”

George Osborne, this chancellor, this week approved the reform principles suggested by the Dilnot Commission into social care system, which proposed a cap on the amount adults should be asked to pay towards their care over their lifetime. The chancellor said the cap, which is planned to come into force after the next election, should be set at £75,000, above the level of £35,000 to £50,000 suggested by the commission.

London Councils’ calculation of a £907m funding gap assumed that the Dilnot recommendations were not carried out. But even if they were, it said, alternative solutions would be required.

“[The Dilnot reforms] do not offer a solution for how the ongoing financial pressures in delivering adult social care for those people requiring local authority support can be eased,” the report said.

The research, co-written by Ernst & Young, the professional services group, identified potential savings of between £240m and £735m for London local authorities from integrating health and social care, providing services via social enterprises or other new delivery models, or higher investment in public health.

But the report, A Case for Sustainable Funding for Adult Social Care, said such innovations were no match for the capital’s expanding needs. Jon Rowney, head of fair funding at London Councils, said: “This report very clearly shows that even with some optimistic assumptions you don’t get anywhere close to bridging this gap.”

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