Care Act first-phase reforms and local government new burdens inquiry
Closed
What the inquiry looked at
“Since 2010, central government has significantly reduced its funding to local authorities and tried to limit authorities' council tax increases. It has offered them 'freeze' grants and required them to get taxpayers' consent for increases above a level that Parliament set. The National Audit Office have estimated that from 2010–11 to 2015–16 local authorities' 'spending power' will have reduced by 25%. The government recognises that placing unfunded new requirements on local authorities puts pressure on them either to increase locally raised income or reduce spending on existing activities. The Care Act 2014 aims to reduce reliance on formal care, to promote people's independence and well-being, and give people more control of their own care and support. For many local authorities, adult social care is one of the biggest areas of spending, with estimated net spending in 2014–15 at £14.4 billion. The Act increases demand for assessments and services to carers at a time when local authority provision has been falling and the number of people in need is rising. In a challenging financial environment, with pressure on all services, authorities may not have enough resources to respond if demand for care exceeds. This inquiry looks at the costs of the Care Act reforms and the demands they place on local authorities, and how government is assessing new requirements which increase local government spending.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
The Department of Health has taken a collaborative approach to the first phase of the Care Act, working with local authorities to plan its implementation. However, we are concerned that carers and the people they care for may not get the services they need because of continuing reductions to local authority budgets and demand for care being so uncertain. We are also concerned about the government’s ability to identify individual local authorities that are struggling and to respond quickly enough. The decision to delay implementation of Phase 2 of the Care Act means that people will have to pay more for their care for longer before the cap on care costs is finally implemented.
Given the tough financial context, we were pleased to hear, though, that government will not claw back the £146m of funding it provided to councils in 2015–16 to prepare for Phase 2.
The Department for Communities and Local Government has not been sufficiently open and transparent in identifying and assessing new burdens on local authorities (like the Care Act) or reviewing their impact. This creates significant uncertainty for local authorities. The Department’s definition of a new burden means that local authorities are not guaranteed funding for some significant new costs, even where these arise from government policy. These unfunded pressures on local authorities will make it more difficult for them to meet their statutory duties and will increase pressure on council tax.
We urge the Department for Communities and Local Government to ensure that departments review significant new burdens following implementation, as the Department of Health has undertaken to do for the Care Act. It also needs to ensure that Spending Reviews and annual finance settlements for local government take full account of the many cost pressures local authorities face, whether or not they meet the government’s definition of a new burden. The Care Act is one new area of work for local authorities which will add significant costs locally. Government must recognise this and ensure funding is monitored as it beds in so that carers and the people they care for do not lose out.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 2 September 2015 to its close on 12 May 2016.
- Oral evidence 12 Oct 2015
- Report 2 Dec 2015
What it recommended
The committee's recommendations are not listed here yet. Read them in 10th Report - Care Act first-phase reforms and local government new burdens ↗ on parliament.uk.
Evidence
Oral evidence sessions 1
- 12 Oct 2015No witnesses recordedparliament.uk ↗