Tendering For Care

A stark warning from local councils that vulnerable people will lose social services.

The claims were made in the Local Government Association's Report and were condemned by the local government minister, as "untrue and unhelpful"

The LGA warned that it will need substantial increases in funding to cope with a growing number of elderly people by 2009. The organisation, which represents 400 local authorities, also warned that councils were being hit by higher utility bills, big increases in the cost of road maintenance and a huge increase in the cost of collecting waste and recycling. The Report says that without additional funding, local government may potentially face a situation, by as early as 2009, where it cannot afford to provide support to the 370,000 people with lower levels of need.

Among the big increases in costs which outstrip standard rates of inflation are:

• unit costs in privately run childrens' homes have increased by 45% and local authority provision by 28% between 1999/00 and 2003/04;
• according to the Personal Social Services Research Unit, pay and prices in the adult social care sector have grown faster than RPI by on average 2% per annum ;
• social care contracts are significantly outstripping inflation - costs of residential care for older people have increased by almost 7% a year. This in part can be explained by increases in the minimum wage of 7.8% in 2004, 3.6% in 2005 and 4.7% in 2006;
• between 2003/04 and 2004/05 alone, local authority spending on energy increased by £31m, (12%). In the first six months of 2006, gas and electricity prices increased by 30%. This has impacted on the contracts negotiated by local authorities ;
• Local authorities have faced increasing costs of construction. Public sector building inflation between 1998 and 2005 was 56%, compared to the RPI increase of 19%
• according to the ROADCON index, highways maintenance inflation was 7% in 2005/06 ;
• a number of authorities are also facing significant increases in bus service tender prices. This is impacting on home to school transport costs, which increased by 4.3% in 2006/07 and concessionary fares.

The chairman of the Local Government Association, Sandy Bruce-Lockhart, said

"For services other than schools, which are a clear government priority, government funding has increased by just 14% in real terms. This is in stark contrast to the 90% provided to the NHS. The government grant has not kept pace with the demands on local government, including rising demand and the costs from new legislation."

The reports says local councils have been better than Whitehall in delivering efficiency savings of some £3bn.