National Audit Office publishes report on Care Act reforms

The National Audit Office has today published a report on the implementation of Phase 1 of the Care Act 2014. The report analyses the Phase 1 changes occurring in April 2015 and the financial impact for 2015-16 of Phase 2 changes.

The Department of Health was praised for the way in which it had implemented the Act including careful consultation and significant involvement of the sector. However, it warned that problems with the way that cost estimates had been calculated meant that councils may not have the resources to respond if demand exceeded expectations. In the short term this could cause local authorities to cut or reduce services.

The Report warned “With the level of demand so uncertain, the Department’s cost estimates and chosen funding mechanisms put local authorities under increased financial risk. In a challenging financial environment, with pressures on all services, local authorities may not have sufficient resources to respond if demand exceeds expectation. In response, local authorities could delay or reduce services in the short term, risking legal challenge and potentially creating extra burden for individuals, their families and carers, who in turn might seek help elsewhere that is not suited to their needs.”

The report also raises concerns over the Better Care Fund. It states that the Department of Health assumes that £174 million (40%) of funding allocated for local authorities to implement the Care Act will come through the Better Care Fund. However, this money is not ring-fenced and its use is negotiated locally between councils and CCGs. Whilst local authorities had to confirm Care Act funding in their Better Care Fund plans, and explain how duties would be met, this is not being monitored in practice.

The Department of Health is monitoring and responding to actual demand and plans to use the data collected in the first three months (April to June 2015) to support its bid for the next spending review later this year. This will set the government spending plans from 2016-2020.

Commenting on the findings of the report, Amyas Morse, head of the National Audit Office has said “the first phase of the Department of Health’s new approach to adult social care has been implemented well. But this places new responsibilities on local authorities whose core funding is being significantly reduced… This risk to value for money needs to be managed. The Department for Communities and Local Government has taken steps since November 2014 to improve its understanding of new burdens on local authorities. But it needs to use intelligence from the new burdens regime to improve its understanding of the pressures affecting authorities’ financial sustainability.”

You can view the full report at the following link: http://www.nao.org.uk/wp-content/uploads/2015/06/Care-Act-first-phase-reforms.pdf

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