Daniel Jones explores the implications of tightening budgets on the care sector in Wales.
Wales is facing a worrying financial future. The nation’s budget, set by the UK Government’s Spending Review settlement, will continue to decrease over the coming years. Welsh Government estimates there will be £1.5 billion less to spend on public services in real terms during 2019-20 compared with 2010-11. The Institute of Fiscal Studies says that Wales should expect ‘an extraordinary eleven or more years of retrenchment in public service spending’.
We are seeing the realities of this in the local authority funding figures for 2017-18 reported last week. Although some local authorities will receive a cash increase of up to 0.9%, all will lose out in real terms, with up to 2% less to spend for some.
Although highlighting the cash increase, Mark Drakeford, Cabinet Secretary for Finance and Local Government, stated that the latest figures will only create an 18-month period of stability, after which there would be “harder choices and more difficult times ahead” for local authorities.
In this dismal context, the United Kingdom Homecare Association (UKHCA) published its national Homecare Deficit report yesterday analysing data from Freedom of Information requests sent to every local authority in Wales and the rest of Great Britain.
Homecare, sometimes referred to as ‘domiciliary care’ or now more popularly ‘care at home’, is being recognised as a real solution to meeting people’s needs out of hospital. In 2014-15, around 47,300 people in Wales used homecare services.
The majority of homecare in Wales is funded by the State with services largely delivered by independent and voluntary sector providers working under contracts with local authorities.
UKHCA’s report reveals that despite costs to care for older people continuing to rise, the amount that local authorities are willing to apportion to the sector does not reflect this. The report reveals a postcode lottery of prices, as councils insist on difference prices to pay for their population’s care.
We regularly publish a Minimum Price for Homecare – an amount we calculate to be the true cost of an hour of care for a homecare provider, that includes costs to fulfil legal obligations (such as the National Minimum Wage) and to run a sustainable business.
Our most recent analysis calculates this to be £16.70 per hour. Comparing this figure with the amount local authorities in Wales actually pay for homecare services per hour, reveals an estimated £23 million deficit on care at home spending during 2016-17.
So what do these figures mean and why do they matter?
The report shows the widespread and systematic underfunding of homecare services.
Of course, trade-offs are a reality and are becoming increasingly crucial and controversial in a world of diminishing resources. In the latest The Welsh Agenda, Professor Marcus Longley, Director of the Welsh Institute for Health and Social Care, was right: trade-offs are unavoidable, they are a reality in the health and social care system and what we need is greater openness and honesty about which issues need to be tackled over others.
However, these data reveal a small part of the real challenge that social care is facing not only in Wales, but across the UK. They are telling of a much larger issue, one that is approaching fast. The evidence is clear: people are living longer with needs that are more complex, under-resourced hospitals are struggling to keep up with the demand and delayed transfers of care are increasing with more individuals awaiting homecare packages every month.
With these pressures in mind we need to consider how Wales can prepare for this demographic change. How can we reduce the pressure on hospitals and move care closer to home? How can Wales deliver quality care that is sustainable, personal and dignified despite tight local authority budgets?
We call on the Welsh and UK Government to make adequate funding available to local authorities in Wales and that they ensure any additional funds intended for social care are spent appropriately, to avoid the current postcode lottery and instability in local care markets.
When local authorities sit down to make difficult financial decisions over the coming months, we call on them to think of the opportunities that care at home and the wider social care sector can offer and to ensure those, including some of our most vulnerable in Wales, receive the high-quality care that they deserve.
 Welsh Government (October 2016), ‘Draft Budget 2017-2018: A budget to take Wales forward’, pp. 3-4. See: http://gov.wales/docs/caecd/publications/161018-budget-narrative-en.pdf
 Institute of Fiscal Studies (September 2016), ‘Welsh budgetary trade–offs to 2019–20’, p. 3. See: https://www.ifs.org.uk/uploads/publications/docs/IFS%20report%20R120.pdf
 BBC (19 October 2016), ‘Council budgets see first cash increase for years from Welsh Government’. See: http://www.bbc.co.uk/news/uk-wales-37690800
 UKHCA (May 2016), ‘An Overview of the Domiciliary Care Market in the United Kingdom’. See: http://www.ukhca.co.uk/downloads.aspx?ID=109
 Professor Marcus Longley (2016), ‘Why can’t we be honest about healthcare choices?’, the welsh agenda, pp. 6-7.