The claim
“I can announce that grant funding for social care will be increased by an additional £1 billion by the fourth year of the Spending Review – and a further £1 billion for social care will be provided through the NHS”
Chancellor George Osborne, Spending Review announcement, 20 October

The background
Mr Osborne’s money for adult social care was supposed to provide reassurance for councils. Despite big cuts in local authority grants, they would  get extra support from the Government to help the elderly and disabled.  It’s councils that fund this kind of care – in people’s own homes or in residential homes  – and at the moment it costs £14.4bn a year.

The analysis
For a positive gloss, over to Richard Humphries, from the King’s Fund health think tank. He told CutsCheck : “The settlement for social care was better than anyone expected. In fairness to the Coalition Government, they have responded to fears about social care.”

But Mr Humphries warned: “I think it is a useful sticking plaster, but no substitute for the serious surgery that is needed to sort out social care funding once and for all.”

The £2bn extra has been welcomed by councils, but they’re certainly not celebrating:  local authorities will receive 28 per cent less from the Government over four years and the cost of adult social care is expected to soar in the years ahead, as a result of people living longer.

The Local Government Association estimates that the rise in the annual cost of adult social care could be around £6bn by 2014/15 – taking total spend to more than £20bn. That’s because of an extra 370,000 people who are likely to need help – and the LGA is concerned about how this funding gap will be met.

The worries don’t end there. The Government has decided not to ringfence the extra money going to councils, giving them freedom to spend the cash as they see fit. A victory for local democracy, perhaps, but it is feasible that some of the resources destined for social care end up financing other services.

Richard Jones, president of the Association of Directors of Adult Social Services said “some very tough local decisions about the share of the overall budget going to adult social care are going to have to be made”.

He added: “Adult social care is the largest area of controllable spend in most councils, so it is going to be extremely difficult to protect current spend when the loss of funding to all services is so great.”

Birmingham City Council is the biggest local authority in the country and spends £300 million a year on adult social care. Before the Spending Review, it estimated that it would need to make cuts of £88m a year by 2013-14 to meet an expected 25 per cent fall in funding from the Government.

At 28 per cent, the cut was bigger than Birmingham and other councils had assumed. But they hadn’t reckoned with the extra money for social care.

So where do these decisions leave them? Steve Wise, a senior manager in Birminghan’s social care department, told Channel 4 News it would be difficult to leave his area untouched if other services were being cut.

He said the £88m figure could come down to £40-50m, adding: “While it is helpful, it does not make the problem go away.” Birmingham has yet to decide how to make the cuts.

The verdict

The £2bn extra for adult social care does not look like being a panacea.  More money will obviously help. But there are three important caveats.

The cash isn’t being ringfenced, which means it won’t necessarily be spent on adult social care. With councils facing cuts of 28 per cent, it would be surprising if some of the extra money didn’t end up elsewhere.

And with an ageing population, as the LGA is warning, there could be a £6bn a year gap in the cost of adult social care by 2014/15.

With Birmingham warning of possible cuts of up to £50m a year, we shouldn’t hold our breath. That’s why we say the cut is deep.