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Press Release

Oversight of user choice and provider competition in care markets

15 September 2011

Shortcomings must be addressed if value for money is to be secured in the future for users of social care "personal budgets" once they are extended to all eligible users by April 2013, according to a report published today by the National Audit Office.

Most people who use personal budgets to pay for their social care report improved wellbeing. But more needs to be done to ensure that care markets deliver a genuine choice of services to all users, that support is available to help them exercise choice, and that essential services relied on by vulnerable people continue to be provided in the event of the failure of a major provider.

Today’s report finds that some people are using their personal budgets in innovative ways, such as pooling them with others to pay jointly for a personal assistant to help with their care needs. Most people who use a personal budget report improved wellbeing although a small minority feel worse off. Some also reported that they found buying care for themselves difficult.

Some local authorities report that personal budgets have led to achieving better value for money in social care, but the overall impact on cost has not been evaluated. And, whilst there are examples of good practice in some local authorities, such as offering help to those with personal budgets to plan their care, these are very localized.

Local authorities are also responsible for those that fund their own care, if they run out of money. However, 60 per cent of local authorities do not know how many “self-funders” there are in their area. Few local authorities offer formal support to help prevent people falling back on state funding. The NAO estimates that the total cost to the taxpayer of the state having to pay for self-funders who run out of money could rise from £0.5 billion to £1 billion per year by 2035.

The Department of Health is responsible for overall social care policy, but it has few means of influencing the way that local authorities deliver care. Local authorities have powers to assess needs and manage care. The Department should determine where market oversight is not sufficient, and if more central oversight is necessary. The recent financial problems faced by Southern Cross illustrate the need for government to develop a system to address serious provider failure.

Amyas Morse, head of the National Audit Office, said today:

"As the population ages and more pressure is put on social care, the Department must ensure that its oversight of the care market is robust, that people have access to the information and support that they need and that it has arrangements in place in the event of large providers getting into financial difficulty."



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