2011/12 FINANCIAL OUTLOOK

April 2011

John Holme, Principal Finance Manager ACS

National context

• Reductions in Government funding for (at least) four successive years

• Reductions in the number of different grants / restrictions on use

• Formula Grant allocations have been announced for two years

• Additional NHS support for social care has also been announced for two years

• Reviews of funding for local government generally - and adult social care in particular – are due to make recommendations in summer 2011

• Public health will transfer to local government in 2013

National funding position…

Central funding for local government: England

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2010-11 Adjusted 2011-12 Final 2012-13 Indicative 2013-14 Nominal 2014-15 Nominal

£ m

illio

n

Schools' grants Other specific grantsFormula Grant (excl. police grant element) Additional support from the NHS

? ? ?? ?

+0.3%

+3%

-8%

-2%

-12%

-1%-6%

+300% -4% +29% -13%

…and how that affects Devon CCCentral funding for local government: Devon CC

-

50

100

150

200

250

300

350

400

450

500

2010-11 Adjusted 2011-12 Final 2012-13 Indicative 2013-14 Nominal 2014-15 Nominal

£ m

illio

n

Schools' grants Other specific grants Formula Grant Additional support from the NHS

?

+0.6%

-13%

-8%-12%

+300% -4%

? ??

Devon County Council budget 11-12

Increases

£’m

Transfers

£’m

Reductions

£’m

Budget

£’m

Change

%

Children & Young People 3.397 (0.195) (17.446) 95.182 -13.0

Adult & Community Services 7.826 (0.260) (17.719) 205.563 -4.7

Environment, Economy & Culture

14.267 (0.252) (12.784) 102.576 +1.2

Chief Executive & Corporate Resources

1.083 0.707 (6.020) 39.254 -9.7

Capital financing, interest & levies

2.711 0 0 66.789 +4.2

Contribution to / from reserves 4.794 0 0 10.444 +84.8

Total 34.078 0 (53.969) 519.808 -3.7

The EEC total includes £12.35m for concessionary fares (transferred from district councils), without which the reduction would be -10%.The contribution to reserves includes funding for redundancies and emergency work on roads

Challenges for adult social care• Demographic trends such as an ageing population and

increased prevalence of disability in the population will add £8m per annum to costs if current patterns of service remain unchanged

• Across the sector, there are cost pressures (eg fuel, energy) and market capacity dilemmas.

• This is unsustainable so change is an absolute requirement.

• 70% of adult social care expenditure is with independent sector providers

ACS budget 11-12

Increases

£’m

Transfers

£’m

Reductions

£’m

Budget

£’m

Change

%

Funding for capital investment 0 0 (2.500) 0 -100

Strategic, corporate & preventative

0 0.817 (4.916) 14.054 -23

Information, learning & arts 0 0 (2.255) 9.303 -20

Targeted support 0.196 (0.106) (3.405) 15.907 -17

Social care 7.630 (0.961) (4.643) 166.299 +1

Total 7.826 (0.260) (17.719) 205.563 -4.7

The budget is displayed net of income from client contributions etc.

Key features of the budget for adult social care

• Protect front line care services with a £2m increase in services to older people, Learning Disability and MH Services

• Our budget in 2011/12 will support an additional 1,221 service users on average care package costs across all client groups

• This is about 25% of the estimated demographic and cost pressures

• Service changes and efficiencies must deliver the balance

Reductions to social care budgets

£’mReduce management costs, freeze staff pay, change terms & conditions

(1.040)

Delivery of savings from social care reablement (1.108)

Redesign and service restructure of ‘Supported Employment’ services – better links to DWP, other agencies and contractors

(0.980)

Increase proportion of people receiving care in own home rather than residential care

(0.825)

Other contractual savings/efficiencies (eg greater use of lower cost services v in-house, redesign of engagement contracts …)

(0.690)

Personalised care – more innovative (and less costly!) interventions from adult social care (£ early days and being monitored)

??

(4.643)

Comparison of spending mixComposition of 2009-10 expenditure on older adults

County councils similar to Devon

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cam

brid

gesh

ire

Leic

este

rshi

re

War

wic

kshi

re

Wor

cest

ersh

ire

Glo

uces

ters

hire

Som

erse

t

Wes

t Sus

sex

Nor

th Y

orks

hire

Linc

olns

hire

Ess

ex

Dor

set

Ham

pshi

re

Cum

bria

Nor

folk

Dev

on

% o

f o

utt

urn

exp

end

itu

re, 2

009-

10

Residential & Nursing Care Day & Domiciliary Care Assessment & Care Management

Source: National Adult Social Care Intelligence Service,2009-10 Use of Resources report

No data available for East Sussex

Gross spending on social care

-

50

100

150

200

250

2010-11 2011-12

£ m

illi

on

Care management & support Residential & nursing care: commissionedResidential & nursing care: in-house Community-based care: commissionedCommunity-based care: in-house Universal services: commissionedUniversal services: in-house

Gross spending on adult social careChanges to adult social care budgets: 10-11 to 11-12

22

50

18

12

1

22

61

16

11

1

90

21

89

20

- 10 20 30 40 50 60 70 80 90 100

Care management &support

Residential & nursing care:commissioned

Residential & nursing care:in-house

Community-based care:commissioned

Community-based care: in-house

Universal services:commissioned

Universal services: in-house

£ million

2010-11 2011-12

The Director’s Commentary to the 11/12 Budget

• A key element in our strategy has always been to keep people safe and independent in their own home for as long as possible, and this will remain so. We will seek to accelerate this by increasing the proportion of care spending on community based services. We recognise that the actual delivery of such changes depends on the individual circumstances of people needing care and changes will always follow an assessment of need and support plans agreed with the people receiving care and their carers. This change in the balance of spending will allow resources to be redirected to where they can go furthest and be most effectively applied. We are determined to achieve radical change in the pattern of care in Devon including extra care housing schemes which enable people to live independently knowing that care is easily accessible when needed. Nonetheless the residential and nursing sector will remain an extremely important part of the care that is provided in Devon and the care that we purchase in the foreseeable future.

http://www.devon.gov.uk/budget_book_2011_12_final.pdf page44

Trends in residential care

Residential care

1,850

1,900

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2,300

Nu

mb

er o

f p

lace

men

ts f

or

wee

k

£1,400,000

£1,450,000

£1,500,000

£1,550,000

£1,600,000

£1,650,000

£1,700,000

£1,750,000

£1,800,000

£1,850,000

£1,900,000

Gro

ss c

ost

of

pla

cem

ents

fo

r w

eek

Residential placements Residential payments

6-07 2007-08 2008-09 2009-10 2010-11

Residential care

1,850

1,900

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2,300

Nu

mb

er o

f p

lace

men

ts f

or

wee

k

£1,400,000

£1,450,000

£1,500,000

£1,550,000

£1,600,000

£1,650,000

£1,700,000

£1,750,000

£1,800,000

£1,850,000

£1,900,000

Gro

ss c

ost

of

pla

cem

ents

fo

r w

eek

Residential placements Residential payments

6-07 2007-08 2008-09 2009-10 2010-11

…and the challenges keep on coming

-15

-10

-5

0

5

10

15

20

25

30

35

2010-11 2011-12 2012-13 2013-14

£ m

illio

n

Demand pressures Available funding

£18 million £29 million £38 million

Based on demographic projections

Based on the county council’s illustrative cash-limits