Magazine article Public Finance

Brave New World Disorders

Magazine article Public Finance

Brave New World Disorders

Article excerpt

Do local government and the health sector have sufficient financial stability to deliver greater integration at the pace and scale desired?

Models of delivery and funding have already been identified for the integration of social care and health. But 15 months away from the general election, the context is still one of uncertainty and pressure in the two sectors.

To understand the prospects for success, we need to look at the two areas in their entirety. To some extent health and social care are ships that pass in the night, communing only around the points of direct contact - hospital discharges into social care, public health and acute pressures. Other parts within the whole system, such as housing, regeneration or mental health services, are integrating even less frequently. And back-office services tend to have sector specific directives to achieve efficiency and economies of scale.

The question remains: will integration save hard cash in real budgets? Or is the business case presently opaque on whether earlier intervention or service coordination is better for users? Will integration only assuage rising demand without necessarily reversing it? In estimating the prospects for savings, does each sector understand the financial position of the other?

Local government finance is in a sorry state. For 2015/16, the Department for Communities and Local Government is considering reducing from 2% to 1.5% the maximum amount by which councils can increase council tax without seeking approval from residents. Councils that have settled just below 2% to avoid a referendum are labelled 'democracy dodgers' and no doubt the same will be said for any maximum, however much smaller that may be. To the accountant on the Clapham omnibus this looks like crude and universal capping. Most councils are clear that while they can balance the books next year, 2015/16 looks a very difficult prospect.

If local government could be said to already know the extent of its own troubles, the health sector has a more nuanced set of problems that are harder to articulate. After decades of centralised national and regional control, the old NHS order has been dismantled (again), but at this stage many do not understand whether or even how the new regime will work.

Andrew Lansky's profound reforms are, however, no longer the subject of debate. Thanks to high-profile scandals, public attention is more focused on the legacy problems of unacceptable quality and culture. In terms of morale, the NHS is used to being supported by its political masters when the going gets tough but now, like local government, finds the motivation and capabilities of its officials under close media scrutiny. Another point here is that while local government is now less regulated by inspection, the health sector finds that inspection is seen as part of the solution. Will inspectors be overzealous to compensate for past errors?

The government's assumption is that, though there might not be enough money, local government will make do. Conversely it appears to take comfort from the idea that there is enough money in health, even though it might not be in the right places. I personally think the risks here are greater than realised. Local authorities vary by a country mile in the way they deliver and organise services, whereas health bodies until now operated more to a blueprint. So if conditions or financial prospects take a turn for the worse, history tells us that the scale and momentum of financial woe can quickly escalate. …

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