Government Has Underestimated Adult Care Costs, Say Auditors

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The government has underestimated the care costs of thousands of elderly and disabled people, says the National Audit Office.

The Care Act 2014 sets out a new legal duty for an adult’s “eligible needs” to be met by local authorities, subject to their financial circumstances. Eligibility is decided through an assessment.

99% of local authorities said they felt confident that they would be able to carry out their legal duties under the Care Act from April 2015.

However, the spending watchdog warns that the government’s “cost estimates and funding mechanisms have put local authorities under increased financial risk given the uncertain level of demand for adult social care”.

It adds that “authorities may not have enough resources to respond if demand for care exceeds expectations”.

Promoting the independence of vulnerable adults “will increase demand for assessments and services at a time when local authority provision has been falling and the number of people in need is rising”.

According to the NAO, the first phase of the Care Act will cost £2.5bn between 2013-14 to 2019-20. More than half of this will be purely for carers’ assessments and services, which represent the largest single cost of implementing the changes.

The Department for Health estimates that 455,000 people are paying for care in their own homes. However, the NAO says the government “has underestimated the demand for assessments and services for carers”.

The government’s estimate is based on the take-up on the number of people receiving Carer’s Allowance. But the NAO warns that carers not in receipt of Carers Allowance “are as likely to seek an assessment” for care needs, at an additional cost of £27 million in extra assessments.

Amyas Morse, head of the National Audit Office, said: “The first phase of the Department of Health’s new approach to adult social care has been implemented well. But this places new responsibilities on local authorities whose core funding is being significantly reduced.

“They may not have enough resources to respond if, as could be the case, demand for care exceeds expectation. This could result in their having to delay or reduce services in the short term. This risk to value for money needs to be managed.”

“The Department for Communities and Local Government has taken steps since November 2014 to improve its understanding of new burdens on local authorities.  But it needs to use intelligence from the new burdens regime to improve its understanding of the pressures affecting authorities’ financial sustainability.”