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Oversight of user choice and provider competition in care markets

Shortcomings must be addressed if value for money is to be secured in the future for users of social care “personal budgets” once they are extended to all eligible users by April 2013, according to a report published today by the National Audit Office. Most people who use personal budgets to pay for their social care report improved wellbeing. But more needs to be done to ensure that care markets deliver a genuine choice of services to all users, that support is available to help them exercise choice, and that essential services relied on by vulnerable people continue to be provided in the event of the failure of a major provider.

Today’s report finds that some people are using their personal budgets in innovative ways, such as pooling them with others to pay jointly for a personal assistant to help with their care needs. Most people who use a personal budget report improved wellbeing although a small minority feel worse off. Some also reported that they found buying care for themselves difficult.

Some local authorities report that personal budgets have led to achieving better value for money in social care, but the overall impact on cost has not been evaluated. And, whilst there are examples of good practice in some local authorities, such as offering help to those with personal budgets to plan their care, these are very localized.

Local authorities are also responsible for those that fund their own care, if they run out of money. However, 60 per cent of local authorities do not know how many “self-funders” there are in their area. Few local authorities offer formal support to help prevent people falling back on state funding. The NAO estimates that the total cost to the taxpayer of the state having to pay for self-funders who run out of money could rise from £0.5 billion to £1 billion per year by 2035.

The Department of Health is responsible for overall social care policy, but it has few means of influencing the way that local authorities deliver care. Local authorities have powers to assess needs and manage care. The Department should determine where market oversight is not sufficient, and if more central oversight is necessary. The recent financial problems faced by Southern Cross illustrate the need for government to develop a system to address serious provider failure.

"As the population ages and more pressure is put on social care, the Department must ensure that its oversight of the care market is robust, that people have access to the information and support that they need and that it has arrangements in place in the event of large providers getting into financial difficulty"

Amyas Morse, head of the National Audit Office

Notes for Editors

  • Social care covers a wide range of services from care homes and ‘meals-on-wheels’ to drop-in centres for disabled people and adult placement services. Social care services in England cost approximately £23 billion per year, with approximately 63 per cent being publicly funded and 37 per cent privately funded.
  • By March 2011, 340,000 people had a personal budget, which means that they can choose how their care needs are met. They either receive a direct payment to purchase their own care or they have a “managed budget”, which allows user choice, but is managed by the local authority. In addition, local authorities fund residential care for around 220,000 people. The Government plans to extend personal budgets, from 30 per cent of users to all eligible users by April 2013.
  • Press notices and reports are available from the date of publication on the NAO website, which is at Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  • The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 880 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 53/11