austerity

Is Government Giving Value For Money?

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Jason Lowther

When money is short, how we spend it becomes even more important. As central government reheats its arguments for austerity following the chaos of the last few weeks, I’ve been reflecting on the contents of the 2021 budget (just a year ago).  The 2021 budget set out not just spending plans, but also a souped up approach to measuring outcomes and cost-effectiveness of government spending. How are these playing out, and will they survive the No 10 merry-go-round?

Rishi Sunak, then eight months into the job as Chancellor, noted that government borrowing was relatively high after the pandemic, warned of the public finances’ exposure to rises in interest rates, and outlined how spending was being linked to the delivery of outcomes alongside across the board ‘efficiency savings’:

The fiscal impact of a one percentage point rise in interest rates in the next year would be six times greater than it was just before the financial crisis, and almost twice what it was before the pandemic…

Decisions have been based on how spending will contribute to the delivery of each department’s priority outcomes, underpinned by high-quality evidence. The government has also taken further action to drive out inefficiency; SR21 confirms savings of 5% against day-to-day central departmental budgets in 2024-25. (page 2)

The “priority outcomes” are the latest in a long line of attempts to prod government spending into delivering effectively on political priorities, rather than blindly increasing/decreasing by x % compared to last year.  A 2019 report from the Institute for Government helpfully outlines many of these earlier initiatives (summary from the House of Commons Library) including:

  • “Scrutiny programmes” and the Financial Management Initiative (FMI), introduced under Thatcher.
  • The Cabinet Office and Treasury set up the Financial Management Unit (FMU) in 1982 to help with creating plans under the FMI.
  • The “Next Steps” report, published in 1988, which recommended the establishment of executive agencies to carry out the executive functions of government.
  • Tony Blair’s administration developed a greater focus on performance targets and Public Service Agreements (PSAs) which put these targets on a formal basis.
  • In 2001, Blair’s government also set up the Prime Minister’s Delivery Unit (PMDU), which was intended to coordinate PSAs and bring them under more central control.
  • Under the coalition government in 2010-15, PSAs were abolished and replaced with Departmental Business Plans (DBPs). These shifted the focus from targets to actions – in other words, they listed what each department would do and by when, rather than what they sought to achieve.
  • Under the Conservative government in 2016, DBPs were renamed to Single Departmental Plans (SDPs), which were themselves renamed to Outcome Delivery Plans (ODPs) in 2021. According to the NAO, SDPs (and by extension, ODPs) are supposed to be “comprehensive, costed business plans”.

As well as having to write down what outcomes they want to achieve, and how they will know whether that is happening, under the SDP system departments were also required “to assess progress in delivering their priority outcomes [and] … share regular performance reports with HM Treasury and the Cabinet Office”. 

In the 2021 spending review, the departmental outcomes were spruced up to reflect the (now last-but-one) PM’s five priorities of levelling up; net zero; education, jobs and skills; recovering the NHS; and reducing the volume and harm of crime.  

This blog’s audience may be interested in “Where does local government fit in this compendium of key priorities?”  The answer is a little depressing: on the last line of the last page (page 30 of 33), just before the devolved government departments. The relevant outcome is inspiring enough: “A sustainable and resilient local government sector that delivers priority services and helps build more empowered and integrated communities”, albeit with the reassuringly non-SMART measure that “the department will provide narrative reporting on progress for this outcome”.  Of course I exaggerate, because local government has critical inputs to very many of the earlier outcomes too, but it’s hard not to conclude that local services and communities were not yet at the top of the ministerial attention list.

Will the “priority outcomes” survive the whirlwind of ministerial movements and unforced economic missteps?  After the last seven weeks, I’m not going to make predictions – but we should know in the next month, and alongside the financial figures they could be our best hint yet on where a Sunak government is heading.

Picture credit: https://www.youtube.com/watch?v=Du_6mRV8Hm8

Jason Lowther is the Director of INLOGOV. His research focuses on public service reform and the use of “evidence” by public agencies.  Previously he worked with West Midlands Combined Authority, led Birmingham City Council’s corporate strategy function, worked for the Audit Commission as national value for money lead, for HSBC in credit and risk management, and for the Metropolitan Police as an internal management consultant. He tweets as @jasonlowther

Can drama “Help” social care?

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Jason Lowther

Photo credit: https://www.youtube.com/watch?v=5Z2ufAl2lko

Fresh from winning the Grand Jury Prize at the Banff Rockie Awards on Monday, Channel Four’s drama Help was yesterday nominated for Best Drama in the Edinburgh TV awards, with its lead actor Jodie Cromer also nominated for Best Actor.  The drama was one of the most watched on the channel, bringing to millions of viewers the plight of care homes and their residents during the pandemic.  Whilst the Help storyline is fictional, it is based on hard and devastating facts.

In my view, Help could be criticised for its farfetched ending and sometimes unsympathetic rendering of the care home manager, however its characterisation of care home staff and residents is both caring and revealing.  Clearly emotionally affected researching the programme, writer Jack Thorn said: “hearing the stories of those at the frontline, having people break down in tears on zoom in front of us has been incredibly moving and galling”.   

My two favourite parts of the programme (no spoilers) are the endless recorded message of a hopelessly over-run “NHS 111” call centre in the background for several minutes, and Jodie Cromer’s wrenching speech to camera (1:34 on the video) demanding “…underlying health conditions, eh?  When did all lives stop being worth the same?”  The programme ends highlighting some stunning research findings: 40% of Covid deaths in the early pandemic (from March to June 2020) were in care homes; the average wage of a care home worker is £8.50 per hour; whilst government provided 80% of PPE needs for the NHS, it only met 10% of adult social care’s needs. 

This last claim is based on the National Audit Office analysis published in November 2020, which found that the adult social care sector received approximately 331 million items of PPE from central government between March and July (10% of their estimated need) whereas NHS trusts received 1,900 million items sent to NHS trusts (80% of estimated need).  Whilst both fell significantly short of what was required, there is an apparent imbalance here.  Data collected by the Care Quality Commission (CQC) showed that, throughout April and May 2020, more than a fifth of domiciliary care providers had no more than a week’s supply of PPE. 

This situation was well known to the Secretary of State, not least because the LGA and the Association of Directors of Adult Social Services wrote stating “we continue to receive daily reports from colleagues that essential supplies are not getting through to the social care front-line. Furthermore, national reporting that equipment has been delivered to providers on the CQC-registered list does not tally with colleagues’ experience on the ground”.  Nevertheless, in a scene included in Help, during a Downing Street press conference on 15 May, 2020, Mr Hancock said: “right from the start, it’s been clear that this horrible virus affects older people most. So right from the start, we’ve tried to throw a protective ring around our care homes”, repeating in the House of Commons on 18 May that “we absolutely did throw a protective ring around social care”. 

Understanding the human costs of these central government failures is difficult, with the effects on staff, residents and their family impossible to measure objectively.  Help does a good job in illustrating some of the pressures on care staff and the pain of relatives unable to visit dying residents, made all the more poignant now that we know some of the behaviour during the pandemic of senior central government actors such as Hancock’s affair and Johnson’s multiple parties forensically examined in Sue Gray’s recent report. 

Perhaps the most basic measure is in human lives.  Last year researchers used the national death registry of all adult (aged ≥18 years) deaths in England and Wales between January 1, 2014, and June 30, 2020 to compare daily deaths during the COVID-19 pandemic against the expected daily deaths.  They estimated that during the early pandemic, about 26,000 excess deaths (almost half of the total excess deaths) occurred in care homes and hospices.  This is likely to be an underestimate since early in the pandemic, testing of suspected cases was available only in the hospital, whereas routine testing of staff and residents in care homes was not implemented until May 2020.

The latest ONS statistics, issued in February 2022, suggest that since the beginning of the coronavirus (COVID-19) pandemic, there have been over 274,000 deaths of care home residents (wherever the death occurred) registered in England and Wales; of these, 45,632 involved COVID-19 accounting for 17% of all deaths of care home residents. 

Intriguingly, The Lancet reported in March that “COVID-19 has had a disproportionate impact on the mortality of care home residents in England compared to older residents of private homes, but only in the first wave. This may be explained by a degree of acquired immunity, improved protective measures or changes in the underlying frailty of the populations.” Meanwhile, last month the Care Quality Commission finally published data on deaths in each care home during the first year of the pandemic (April 2020 to March 2021).

Whatever the precise figures, it’s clear that adult social care residents and staff were badly let down by central government, far from the Secretary of State’s “protective ring” narrative. This despite the best efforts of care managers, local commissioners and councils discussed in Luke Bradbury’s blog here last week.  Help does a fantastic job of showing the impact of these critical central failures – and recognising the incredible work care staff did in such difficult circumstances with so little financial reward.

Collaborative management in the face of government response to COVID-19? Evidence from care home staff and stakeholder experiences in West England.

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Luke Bradbury

Picture credit: https://socialvalueportal.com/support-national-effort-covid-19/resources/news/social-value-in-action/support-national-effort-covid-19/

As a student on the MSc Public Management course at INLOGOV and having worked part-time in care for a number of years, I felt my final dissertation project was an opportunity to investigate the impact of COVID-19 on adult social care and the implications of government intervention. The works of organisations such as SCIE (Social Care Institute for Excellence) have already shown that inaccurate government guidance – combined with years of underfunding – resulted in the sector being ill-prepared for dealing with a pandemic and that care policy and practices had to rapidly adapt to unforeseen circumstances with limited support.

This case study aimed to explore this in the context of two care homes in West England during the early months of the pandemic. It was also interested in the role of collaborative management between care homes and their surrounding communities including local authorities, charities, businesses etc. ‘Collaboration’, in this context, took some influence from Helen Sullivan and Chris Skelcher’s conceptualisation of a collaborative agenda governing the (often mutually) beneficial cooperation between different public bodies and community agencies. One might consider how care homes may have banded together with their own local communities to ensure they still had the means to provide quality care in the face of COVID-19. Indeed, recent research by Fiona Marshall et al. has shown that, where government support was scarce, many care homes formed resource networks with external stakeholders such as local businesses, dentists, veterinaries, and domiciliary care agencies to source vital materials including personal protective equipment (PPE), electronics, toiletries, bedding and even food.

This study used semi-structured interviews and recruited five participants via a combination of snowball and non-probability purposive sampling. This included two deputy care home managers representing two different care homes in West England as well as a carer, a local parish councillor, and a co-owner of a local chemicals firm. The latter two participants were recruited as active members of the local community for one of the two participating care homes (or ‘external stakeholders’). Thematic analysis and grounded theory-based coding was then used to interpret the data.

The analysis firstly uncovered a strong dissatisfaction with the central government response to COVID-19 amongst all participants. Care staff spoke about how the implementation of the Coronavirus Act forced them to take on extra patients from hospital without an effective COVID-19 testing system in place and that inconsistencies between government guidance and company policy led to confusion amongst managers. Practices were forced to adapt; for example, adhering to stricter infection control measures and taking on extra care duties such as virtual GP consultations. External stakeholders also spoke about how these circumstances encouraged some level of collaboration within the community and a desire to assist local care organisations; for instance, a parish council was enabled to collaborate with the local chemicals firm and local school to source PPE such as goggles and hand sanitizer which could then be distributed to care providers.

Despite this opportunity to establish a resource network, collaboration between the two care homes and their surrounding communities was not evidenced as Marshall et al. had found previously. This was attributed to two main reasons. Firstly, resource dependency was less prevalent because effective internal management within both care homes meant they already had a sufficient supply of PPE. As one of the deputy managers recalled, the manager for her home made the decision to stock up on PPE and to lockdown early, therefore minimising the spread of the virus. The second reason was down to external circumstances that aided both care homes. Since both operate within rural areas of West England, they occupy less densely populated regions than care homes within inner city locations and therefore surrounding transmission rates remained relatively low. The implication is that locality largely eliminated the need to establish support networks with external stakeholders because they were not experiencing the same level of devastation seen in many other care homes. This was corroborated by staff who felt ‘fortunate’ compared to what they were seeing on the news.

These findings indicate the importance of effective management but also the extent to which contextual circumstances may or may not have necessitated collaborative networking between care homes and their surrounding communities during the early months of the pandemic. Whilst collaboration was less necessary here, the background coordination of parish council and local actors to produce a ‘safety net’ of resources did highlight the potential of localised collaboration and intervention in times of crisis. Perhaps, had such coordinated localised governance been enabled within the surrounding communities of less fortunate care homes, they may have been spared some of the devastations of the pandemic. Regardless, there is certainly a strong call for greater support towards the care sector for government and policymakers to consider – particularly in terms of clearer guidance, increased funding, and enabling localised governance to support care organisations.

Luke Bradbury graduated from the MSc Public Management in September 2021.

After austerity, comes the reckoning

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Jason Lowther

The publication last month of the Institute for Government’s report on the impact of cuts in local services during the decade of austerity has revealed to the public what has been obvious in the sector for years – austerity was hugely unfair and hit the poorest hardest. 

Neighbourhood services under strain is written in IfG’s usual forensic style, and its conclusion is all the more brutal because of it: the most deprived areas received the biggest grant cuts, resulting in bigger reductions in local services such as libraries and recycling.  Central government grants were cut more in deprived areas because of the way cuts to grant funding were distributed ignoring councils’ different degree of dependency on this income source.  Because of the central cuts and pressures such as the increasing demand for social services, councils have been forced to cut preventative and universal services like children’s centres and housing programmes to help vulnerable people to live independently.

The report’s detailed analysis of changes in spending reported to DHCLG concludes that most councils chose to protect similar services.  ‘Relatively protected’ services included environment and regulatory services, homelessness and public transport.  At the other extreme, most councils applied higher than average spending cuts in housing, cultural, and planning services (figure 1 below).  This mirrors earlier analysis by the National Audit Office (which also highlighted the protection of social care services).

Figure 1: Local authorities that disproportionately cut, relatively protected, or increased neighbourhood services spending between 2009/10 and 2019/20, by category

Source: Institute for Government analysis of DLUHC, Local authority revenue expenditure and financing in England: individual local authority data – revenue outturn 2009/10 and 2019/20.

The IfG report hints at the innovative ways different councils responded to these pressures, from contract renegotiation and the use of new technology, to service redesign and rationalisation.  For a more detailed exploration of this, I recommend Alison Gardner’s excellent thesis on how local councils responded to austerity – including strategic asset management, shared services, commercialisation, co-production and demand management.  Whatever methods were used, however, it’s clear that by the second half of the decade of austerity the cuts were no longer into ‘fat’ but into ‘flesh’.

These new findings add to a growing library of research on the effects of the UK government choice to pursue austerity policies, including a BMJ study in October 2021 which suggested that the constraints on health and social care spend during this period of ‘austerity’ have been associated with 57,550 more deaths than would have been expected had the growth in spend followed trends before 2010.  Considering cuts to local government funding specifically, a July 2021 study in The Lancet estimated that cuts in funding were associated with an increase in the gap in life expectancy between the most and least deprived quintiles by 3% for men and 4% for women between 2013 and 2017. Overall reductions in local government funding during this period were associated with an additional 9,600 deaths in people younger than 75 years in England. Well before the pandemic, the UK was seeing a rapid slowdown in life expectancy gains in the 2010s and, although a number of other high income countries also saw such slowdowns, of large populations only the USA experienced a more severe slowdown/reversal and the magnitude of the slowdown in the UK was more severe than other large European populations.

Perhaps the most damning finding of the IfG report is that central government lacks the information to know what the impact of its spending cuts are on local services.  This echoes the assessment of the Nuffield Trust and Health Foundation back in 2014 which warned government was making decisions with ‘no comprehensive way to quantify the impact that social care cuts are having on their health and wellbeing’ and were therefore effectively ‘flying blind’.  Having abolished the Audit Commission in 2010, the government was left with no comparable performance statistics for two-thirds of local services.  Some may believe that this was quite convenient, given what we are now learning about the effects of that government’s spending policies.

Getting under the skin of council budgets: what does good scrutiny look like?

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Cllr Ketan Sheth

It’s a testing but all-too-familiar mix: funding cuts from central government, skyrocketing demand for local services, a growing population, tough choices and communities vulnerable as they recover from the social and economic shocks of the pandemic. As we approach budget setting, our situation in Brent – a NW London borough – mirrors the position of local authorities around the country.

​Against this challenging backdrop, I believe the role of effective Scrutiny is more important than ever, and so too is learning from one another.

This year, I co-chaired Brent Council’s Budget Scrutiny Task Group. It was our job to get under the skin of budget proposals, to grasp their real-world effects, to understand any mitigations, and to make recommendations where we felt the decisions of our Cabinet, and Full Council, could be strengthened.

To bring forward a balanced budget, this year we were called to scrutinise a package of savings totalling £2.7million, alongside Council Tax increases.

A deeper approach to scrutiny

Given the stark financial picture across the country, from the outset, we wanted to make sure that scrutiny was grounded in the complex reality of the difficult decisions that the Cabinet needed to take. We were determined that the scrutiny process must add value.

As a group, we worked with officers to develop a much broader approach than simply reviewing proposed savings. Instead of solely relying on the community consultation undertaken by the Cabinet, we went into detail on the impacts and sought out testimony from people on the ground. We felt we needed to get a deeper understanding of the experience of those who use Brent’s services and the complexity of their situations.

The idea was to test underlying assumptions made in the proposals, in order to give Cabinet and Full Council information and evidence to base their decisions on. We identified a number of areas to probe:

1. Impacts of Covid-19 on income from business rates, Council Tax and rents;

2. The impacts on health inequalities work when grant funding ends;

3. Implications of Covid-19 on the adult social care budget, especially mental health;

4. Pressures within the Dedicated School Grant; and

5. How the council’s £17m Covid-19 recovery package is being spent

The task group agreed a mix of less conventional scrutiny methods to build this holistic view, including focus groups and detailed evidence sessions with people on the ground. From local head teachers to voluntary and community sector partners, teams from our well-being  services, and Brent Hubs staff (Brent Hubs are spaces in the community bringing lots of services together under one roof to improve access for residents with more complex needs).

By taking this approach, we were able to assess the wider financial and service context, identify possible future budget pressures and the likely emerging needs of our communities.

It allowed us to make a number of nuanced, practical recommendations when reporting back. Most focused not on the savings themselves, but on how the Cabinet  might work differently to overcome and address some of those pressures. Helpfully, the group also identified areas where we felt the Council could effectively lobby for more support nationally and regionally. We’ve also put in place mechanisms for pulling insights from these testimonies as well as learnings from this deeper process through to future budget scrutiny cycles. Ultimately, we are all trying to deliver a better outcome for local people, and so I’m a big believer in the power of scrutiny to support good decision-making. I think that this is best realised by being a “critical friend”. The deeper, more contextual approach we took in Brent this year achieved just that, and I look forward to seeing these efforts bear fruit when the budget is taken to Full Council later this month.

Cllr Ketan Sheth is Brent Council’s Chair of Community and Wellbeing Scrutiny Committee and co-chaired its Budget Scrutiny Task Group

As the children return to school in September, the change in Pupil Premium funding will see many schools lose out

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Cllr Ketan Sheth

Cllr Sheth on a recent visit to a school

Pupil Premium funding for our most disadvantaged children, based on the number of children eligible for free school meals (FSM) data collated every January, provides critical funding to schools for essential resources, which in turn benefits all children. Each FSM successfully registered increases the funding to schools, a substantial amount of which does not reach schools because not all parents who are eligible apply for FSM for their child.

New Government conditions have seen a change in how it is calculated. By shifting from a January date, for calculation, to the previous October date, a stretched borough, such as Brent, now, will have 900 fewer secondary school pupils eligible, amounting to a loss of £860K in their budget. 

Pupils at primary schools fare a little better in Brent; but the picture elsewhere in the country is less kind – 62,000 fewer eligible pupils in primary schools in England, according to FFT Education Datalab analysis of the Department of Education recent figures.

The need for FSM and eligibility is rising, as are casual admissions all year round, due to changes in family incomes. This change results in £90M missing from budgets when schools have already been under intense pressure with lockdown and are attempting to build-up again as we recover following Covid-19.

The result means that the Government has introduced a detrimental lag in funding, which will introduce a current year saving; but will impact on the much needed essential support for children who have had the greatest challenges of home-learning throughout the pandemic and now beyond.

We are often reminded of the mantra: “every child matters”; if we are serious about levelling-up everywhere then we must rethink this decision and how we best support our children, so no child is disadvantage. The time between September, the start of the school year, and January allows for an accurate reflection of school children in need of FSM; and therefore, schools requirement for Pupil Premium. The timing is essential to promote and ensure effective communication with parents/carers, enabling them to register for FSM.

There is some speculation amongst head teachers that the Government may overhaul or perhaps completely remove the funding – this will be catastrophic and a retrograde step for the levelling-up agenda.

Cllr Ketan Sheth is Chair of the Community and Wellbeing Scrutiny Committee of Brent Council