Staring into the abyss: Local authorities face billion pound blackhole

Local authorities funding for elderly social care is set to be slashed by 18 percent by 2015/16 and funding for working age and children’s social care services will also plunge into the red by 23.4 percent, an RSA 2020 Public Services report has warned.

In a presentation to local government chief executives, Beyond Nudge to Demand Management revealed that by 2015/16 social housing-related spending is expected to drop by 33.8 percent and policing by 26.2 percent.

View the Beyond Nudge to Demand Management report

The RSA report, shows that demand for social services is set to spiral, with the numbers of people aged 65 and over who require daily disability-related assistance to rise from 1 million in 2010 to 1.9 million in 2030. People with at least one long-term health condition are also expected to increase from 15.4m to 18m by 2025.

The work by RSA 2020 Public Services in partnership with Local Government Association, Impower and the Economic and Social Research Council concluded, that by 2022, the numbers of disabled people over 65 requiring care is set to increase by 40 percent and the numbers of people with moderate or severe disabilities is set to rise by 32 percent.

The RSA report comes as the Local Government Association reveals local authorities face a £14.4bn black hole in funding by 2020.

The RSA report found that local authorities have already done a great deal to adjust to difficult financial circumstances over recent years, making significant savings and efficiencies, but that the limits of such reforms are being reached.

The report warned that with rising demand, local authorities face choosing between reducing their scope and role (with public services retrenching to becoming providers of last resort) and attempting to reduce levels of demand by radically redefining relationships between citizens, communities and services.

Anecdotal evidence from the frontline, uncovered in the RSA’s preliminary research, suggests that some important preventative services are facing cuts because the value of the cost avoidance they bring about is poorly understood, under-recognised and under-valued.

Commenting on the report, Director of RSA 2020 Public Services, Ben Lucas said:

‘Most current demand management strategies are limited to one service area, instead of being part of a wider, more fundamental system change that could be replicated across the public service landscape. While they help achieve cost savings and improvements in outcomes, demand management strategies are not yet seen as a key part of the response to reduced public service funding. The public sector must see its role as supporting livelihoods; building community resilience; and reducing the need for traditional services by changing relationships between citizens and state in the longer term.’

The report concludes that there is now increasing recognition of the need for public bodies to establish a new social contract between citizens, services, business and civil society. The public sector must see its role beyond providing public services and instead consider how it can support livelihoods; changing relationships between citizens and state in the longer term; building community resilience; and reducing the need for traditional services.

View the Beyond Nudge to Demand Management report

Notes to editors

1.    For more information email RSA Head of Media Luke Robinson or call 020 7451 6893 or 07799 737 970