- Devolution leaders have forecast a £176m financial gap for social care services by 2021.
- Greater Manchester is better placed than most regions to deliver its STP, because of its £450m transformation fund.
- But demand and cost pressures ’significantly outweigh’ the government’s additional funding
Health leaders in Greater Manchester have warned that social care funding problems threaten to jeopardise the delivery of their regional plan – despite their £450m transformation fund.
In a submission to NHS England as part of the sustainability and transformation plan process, published by the GM devolution team, leaders said there would be a £176m financial gap for social care services by 2021.
The document says: “There remain significant issues with social care including the profiling of the social care gap and the mechanism by which social care precept and Better Care Fund (BCF) will impact.
“These factors could undermine GM transformational efforts over the next 18 months and potentially jeopardise the achievement of NHS savings over the four years.”
Partly due to the region’s devolution deal, Greater Manchester’s STP is more advanced than most other areas, and the document sets out progress made in the last six months.
It also appears better placed than many to deliver its plans, because it has already been allocated a transformation fund of £450m over five years. Meanwhile, significant progress has been made to integrate health and social care services in boroughs such as Salford and Tameside.
The £176m gap in social care funding is the projection after the impact of additional resources announced by the government.
A spokeswoman for the devolution team told HSJ: “The projected additional pressures through the national living wage rising to over £9 per hour, demographic and demand growth, inflationary pressures and the social care budget reductions required to contribute to the revenue support grant reductions significantly outweighs the additional resource from the social care precept and the improved Better Care Fund.”
In last year’s spending review, the government allowed local authorities to raise council tax by 2 per cent as a specific precept for social care services. Ministers said this would raise £2bn a year nationally by 2019-20. Experts have warned this is likely to be an overestimate, and said authorities in more deprived areas will struggle to raise adequate amounts through this mechanism.
The anticipated yield for the social care precept in Greater Manchester was around £18m, when a proportional share of £2bn would be closer to £100m.
National calls for an increase to social care funding in the autumn statement were ignored by the government.
Richard Humphries, assistant director for policy at the King’s Fund, said: “The key point here is if Greater Manchester is raising these concerns then it’s going to be much worse elsewhere, where they haven’t got the relationships and groundwork in place, and they don’t have any confirmed transformation money. It’s an ominous sign for other STPs.”
He pointed out the social care precept will raise just £382m nationally in 2016-17, adding: “The precept revenue won’t get anywhere near the size of the funding gap, and places that need it the most will get the least. It will be patently inadequate.”
The Department of Health said it recognises that councils have “varying capacity” to raise council tax, adding the additional £1.5bn being put into the Better Care Fund by 2019-20 will provide some flexibility.
It added in a statement: “We understand the social care system is under pressure, and are committed to ensuring everyone who needs it can get affordable and dignified care.
“Taken together, the new precept and additional Better Care Fund contribution mean local government can increase social care spending in real terms by the end of the parliament.”
NHS England say the £450m transformation fund for Greater Manchester represents its “fair share” of national funding over the period, although no other region has so far been given a similar pot. There are also fears the transformation element of the national “sustainability and transformation fund” will be lower than anticipated, due to the funds continuing to be needed to plug NHS provider deficits.