Is your council in the top 10 to lose or gain £5.6m next year?

There has been much debate about the government funding for adult social care reform and whether this is sufficient. There has been much less about how that funding is to be divided between local authorities.

The principles are easy enough to identify – including fairness and need – but defining these, selecting the data to support any approach, and then managing their interactions, quickly becomes an elaborate game of 3D chess. Small changes can have disproportionate impacts on the funding that councils receive.

The Department of Health and Social Care (DHSC) recently published a consultation on how they propose to manage this distribution for adult social care means test reform for 2023-24 – a total of £771m. Their proposals divide into three “buckets”:

• Funding for over 65s who would become newly eligible for state-funded care
• Funding for under 65s who would become newly eligible for state-funded care
• Costs for implementation of the reforms, including assessments

For the first of these “buckets” DHSC are proposing to use an updated formula designed for the original 2014 “Dilnot” reforms, but are consulting on three different options for the other two. There is a logic to each of the different approaches, but each formula has a different impact and the effect for individual councils can be negligible or huge.

Take the funding for implementation and assessments. For Nottinghamshire, the difference between each of the three potential approaches could mean receiving £4.24m or £4.28m. Barely noticeable. But for Redbridge it is the difference between £0.24m and £1.06m.

We’ve set out below the 10 councils for whom the different options on funding formulae could have the biggest impact in both cash terms and as a proportion of their 22-23 adult social care budgets. Though the difference may be just a few percentage points of existing budgets, and a smaller impact than inflation is already having on finances, for many local authorities this is likely to be material in their planning for the coming years.

This reflects the overall uncertainty local authorities are managing while implementing means test reform. Future demand and costs for charging will be subject to a huge number of factors both within and outside their control. IMPOWER’s EDGEWORK® approach encourages leaders to embrace complexity and consider how they can drive change across the entirety of their influenceable space. If you would like to discuss the findings below or find out how IMPOWER can support you to manage the uncertainty of the coming reforms, please get in touch.

Click here for the full list of the differential impact on all councils.

Below charts show the difference between the maximum and minimum grant funding available under DHSC’s proposed distribution formulae. Data publicly available via gov.uk as individual service areas, combined totals are provided by IMPOWER.

Those due to receive maximum funding

Those due to receive minimum funding