The vicious cycle of care

Pete Roberts

The Welsh Labour Government is weeks away from a decision that could destroy local government, the care sector, and the NHS in Wales.

A few weeks ago, the First Minister implied that the priority for any revenue growth would be spending on the NHS because, “local authorities won’t go bankrupt and only need keeping an eye on.”

What she fails to grasp is that, unlike the NHS, local authorities have to both set and deliver a balanced budget, and the spiralling costs of Adult Social Care (ASC) are making it increasingly difficult to do either.

The Welsh Local Government Association (WLGA) recently published a summary of the expected cost increases this year, £106m, and next year, £223m, due to ASC – the latter accounting for over 40% of all cost pressures on Local authorities.

Creaking budgets, broken care homes

In my authority of Powys, our half-year budget position Adult social care is projecting an in-year overspend of £4.4m resulting from the increased volume and complexity of need, but this also includes additional costs borne by placing patients discharged from hospital into temporary care home accommodation as they can’t return straight home.

As worrying is that The WLGA estimates were made before the announcement that the care sector will face the full impact of the Chancellors Employer’s National Insurance increases. The problem is that there is only a limited margin in these businesses.

Care homes may fold, and domiciliary care providers may hand back care packages as they leave the sector. That leaves local authorities to pick up the pieces in a market where the new contracts will have the NI rise priced in and agency rates (assuming they have capacity) will be rising through the roof.

The vicious circle

 All this will impact on the NHS, fewer care homes means more patients trapped in hospitals and longer waiting times. Delayed treatment will mean more demand on social care packages and beds. And the cycle begins again with fewer beds for discharge.

It also damages preventative services, leisure centres, roads maintenance and gritting, and many more council services will face cuts to balance the books or eye-watering council tax rises will be needed, driving households further into poverty and generating more long-term demand.

Avoiding this nightmare is at the heart of calls from the Welsh Liberal Democrats. If Welsh Government wants to fix the NHS then they need to start with social care. They need to provide in-year support to tackle the funding crisis and take seriously the pressures coming into next year when they set the local government funding levels, they must put their weight behind calls to review the potentially catastrophic risk presented to the care sector by the National Insurance rise.

If Welsh Government chooses to ignore this crisis, then they could see all three sectors come crashing down around their ears before the Senedd Elections in 18 months.

When cash isn’t king

It is however not too late to change direction. In the short term, there needs to be a recognition of the financial burden that local authorities are under when it comes to delivering their social care duties.

A major cash injection into the NHS may grab headlines but sorting out the crisis in social care will free up more beds for operations. Health boards also need to play their part. It is easy to blame councils for delays in releasing patients.

However, in many cases, there are not the staff to provide the community-based care needed, leaving patients trapped in a hospital bed. Having the NHS contribute to the cost of temporary placements in residential care will free up beds, ease cost pressures for local authorities, and deliver a better outcome for patients and NHS Trusts alike.

Equally controversial is increasing the cap that is present on some non-residential care charges. While this remains frozen and delivery costs increase there is an expanding gap putting additional stresses on council budgets.

In the medium term, there needs to be a fundamental review of how social care and the NHS interact. The current system, with handovers between local government and the health sector, creates unnecessary bureaucracy. Wales is small enough to create and develop a cohesive health and social care model that could become the exemplar for the UK as a whole.

Radical change required?

As can be seen from the Welsh Local Government Association figures Adult Social Care is a major challenge for council finances.

This is only going to get worse once the Employer’s National Insurance increases are passed on. Councils are legally obliged to balance their budget so these costs will lead to cuts elsewhere or major council tax rises.

It will need cross-party support but, if these changes don’t work, the time will soon come to ask whether adult social care should be removed from local authorities and merged into the wider health sector.

Pete Roberts is a Welsh Liberal Democrat councillor representing Llandrindod South on Powys County Council.