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Unfair Cuts in Detail

This is an older article some of the data is now out of date. Our most recent report A Fair Society? gives the best overview of the impact of cuts on people in poverty and disabled people. However, some of the examples below are still relevant.

The government is planning to make unprecedented cuts to the support and income of disabled people. At least 25% of the cuts target the 3% of the population with the most severe disabilities - and this is a very conservative estimate.

The welfare system is confusing and the impact of the cuts is complex. On this page we have tried to work out what the cuts mean for disabled children, adults, older people who are frail and people with mental health problems. As we find out new information we will update this page.

If you think these cuts are unfair please join the Campaign for a Fair Society.

We have broken the cuts down into six areas:

1. Cuts to social care

2. Cuts to benefits

3. Cuts to housing

4. Cuts in employment

5. Cuts in our communities

6. Cuts in choice and control

Introduction

There are lots of different ways of looking at the cuts, and the way the government's figures have been published sometimes makes it very difficult to see what is happening. I have decided to focus on how the cuts have been targeted and I have used the government's October 2010 Comprehensive Spending Review as the basis for a description of the cuts [1].

At the moment we are focusing on England. Scotland, Wales and Northern Ireland have more discretion in how the cuts will be implemented. However all four countries will face similar problems and cuts to the benefit system will effect everyone in the UK.

The cumulative cut to government departmental spending by 2014 is 8.3%, against a base of £326.6 billion. This is a cumulative cut of £27.1 billion for the UK, a cumulative cut of £23.8 billion for England. This figure will be the starting point for the calculation of how the burden of the cuts falls [1].

To try and understand whether the cuts are fair we have focused on the issue of disabled children, adults, older people who are frail and people with significant mental health problems. At anyone time there are over 1.5 million children, adults or older people with disabilities or needing care services in England [2]. The population of England is over 50 million. Therefore the population of those in the greatest need and eligible for social care is about 3% of the population. 

It is important to note that there are other groups with significant needs who are excluded from these calculations. For example, funding to protect women from domestic violence is under threat. However the 3% figure is important because the mark of a fair society is the way in which supports people with disabilities to be included as full citizens. If the cuts are necessary but also fair then every effort will have been made to ensure that the 3% of the population with the most severe disabilities will be protected from harm.

But this is not the case, this 3% are not protected, this 3% are targeted for cuts.

1. Cuts to social care

The biggest cut made by central government was the cut made to local government. Cuts in central government funding in England for local government will increase each year until by 2014 the cumulative cut in funding will be 28%. A cumulative cut of £8 billion pounds, which is 34% of the government's cuts in England. [1]

Social care spending is the largest item of unprotected spending for local government [3]. Spending by local authorities in England on adult and children social care was £20.7 billion in 2007-08 [4]. This means that spending in 2010-11 will have been over £21 billion.

Central government's claim is that cuts do not need to be made to social care because those cuts can be directed elsewhere; however there are very few alternative places to make cuts. The two other significant services are roads and transport (about £6 billion) and cultural environmental and planning (about £10 billion). It is highly unlikely that there will be any way of simply shifting the burden of cuts from social care to these smaller items. Roads will still need mending, rubbish will still need collecting and costs in this area are not easy to reduce as most provision has been outsourced and is subject to contracts with independent providers.

In the worst case scenario the whole 34% burden would fall on the 3% of the population with the most severe disabilities in the form of cuts to social care services.

However if we take the three main items of unprotected expenditure: social care, roads, environment (refuse etc.) and the burden for social care was split proportionately between them then social care represents 58% of unprotected services. 

So on a much less pessimistic analysis perhaps only 19% of the burden of the cuts would fall on the 3% of the population with the most severe disabilities in the form of cuts to social care services.

It may be wondered whether Council Tax may offer a solution to this problem; however Council Tax represents about 5% of the total UK tax bill. Of course, in theory, it is possible that councils would be able to create disproportionate increases in Council Tax to compensate for the cuts from central government. But if this was a solution there would be no cuts - there would just be a huge tax increase focused on Council Tax payers. This is so unlikely, and Council Tax is so small, I have not made any allowance for it within this analysis.

It is also important to note that the 28% cut to local government is an average. The cuts to different local areas vary and some areas do better and some worse. It has been widely noted that cuts are deeper in more deprived communities. For example the biggest cuts to councils in Yorkshire and the Humber will be to 4 out of the 5 most deprived areas [5]. So in some areas the harm to people with severe disabilities and mental health problems will be much greater.

Information confusion

It is also interesting to note the confused nature of the government information about social care funding.

The government talks as if new money for social care has also been found as part of its spending review. However the money that it describes as if it were new (the Adult Personal Social Services Grant PSS Grant) is not new. It is the same money that is described in the 2007 letter by the Director General of Social Care and which has been provided to local government for many years [6]. This PSS Grant does not provide any new protection or addition for social care; in fact the only innovation is that this money (which is only about 5% of the whole social care budget) is now being fully pooled into the general funding of local government - so that now it does not need to be spent on disabled people.

It has been presented as if it is new money whereas it is simply the termination of the ring-fence around money that was previously given to social care.

It may be that, by 2014 there will be eventually be an additional of £1.1 billion, and this could offset some of the cut of £5.88 billion. However in the past funding from the PSS has not been inflated in line with cost increases and so this figure would need to be deflated by the significant increase in prices that we can expect to see over the next 4 years. However, to repeat, this is not additional money - at best it is a minor reduction in the severity of the cuts to social care - combined with the abandonment of any ring-fencing.

Further confusion has been created by government talk of there now being money for social care 'within the NHS'. However the NHS does not deliver social care - that this is a local government responsibility. Furthermore the mechanisms for transferring funding from the NHS are weak and in the current climate many are being terminated as statutory bodies retrench. It is impossible not to wonder whether talk of social care funding coming from within the NHS is not a public relations stunt: declaring that the NHS is safe and then trying to count parts of its funding against areas outside the NHS where inevitable cuts are going to be made.

We will endeavour to keep on top of the information that is emerging form within government. Please contact us if you can find any additional information.

Reductions in eligibility

One way local authorities can use to implement cuts is to raise eligibility critieria so that your needs have to be even greater in order to be entitled to any help.

Central government created a policy called Fair Access to Care Services (FACS) which is meant to set a framework for local government. Local authorities set a level of need which people must reach in order to be entitled to care  - the highest level is Critical. In 2008 12% of local authorities had set their eligibility at Critical - the figure today is likely to be much higher [7].

If you live in an area where eligibility is set at critical then this means you will NOT be entitled to care in any of the following circumstances:

  • you have only partial choice and control over your immediate environment, or
  • you have been abused or neglected, or you will be abused or neglected, or
  • you cannot carry out the majority of your personal care or domestic routines, or
  • you cannot sustain involvement in work, education or learning, or
  • you cannot sustain the majority of your social supports and relationships, or
  • you cannot fulfil the majority of your family roles or other social roles, or

Local authorities will often choose to increase eligibility thresholds in order to try and save money by serving fewer people. However this also has the impact of driving more people into crisis and increasing the need for more expensive services. And if more people need more expensive services then the pressure to serve fewer people will increase. This approach undermines prevention of need. If there are 1.5 million people receiving social care in England in 2010 this number will need to be radically reduced in order to cut social care costs.

Increased taxation or means-testing

Local authorities will also be forced to increase means-testing or charging for any care or support that disabled people or older people receive. Means-testing is an extra tax that only disabled people are forced to pay on top of all the other taxes we pay - it is a disability super-tax. The level of this disability tax varies from place to place; but at its highest level it is defined by a central government policy which allows 100% charge on all care when savings are greater than £23,250 [8].

Of course this means that many people with very modest income and savings are either excluded or will end up spending or giving away savings in order to become eligible.

Most people do not know that our current entitlement to social care is so poor - for it is only used by 3% of the population at any one time. Often people assume that social care will be provided by the NHS and in the same way - as a universal, non means-tested entitlement. This is despite the fact spending on social care is less than 20% of spending on healthcare and that social care is much less expensive than healthcare.

But this is not the case. Often people do not realise how unfair the current system is until it's too late and they are in desperate need of help for themselves or someone they love.

2. Cuts to benefits

The government is also planning a series of changes to the benefits system which it believes will both reduce the overall level of spending and give more money to some people and less money to others. Currently the main items of expenditure are as follows [9]:

Main Benefits in Welfare System
BenefitOverall Cost (bn)Recipients (mn)Per Capita Average (£)Government Objective
Pension72.412.55,787Grow
Tax Credits247.23,333Grow
Housing Benefit21.54.84,530Cut
Disability Living Allowance12.53.23,879Cut
Attendance Allowance5.41.63,325Cut
Child Benefit117.21,528Uncertain
Income Support5.81.73,301Cut
Pension Credit7.72.72,880Uncertain
Council Tax Benefit4.11.4705Cut
Job Seeker Allowance4.81.43,453Cut
Carer's Allowance1.61,767Cut
Employment Support Allowance6.92.52,782Cut
Independent Living Fund.20.029,524Cut
TOTAL

Some of the government's ideas about reforming the benefit system seem good. The system does need to be simpler and there do need to be better incentives to make work pay. However the government is planning to do 3 things at once:

  1. Reduce the overall level of spending on benefits by £18 billion per year
  2. Increase the level of spending on pensions
  3. Reduce the benefits taken away from people when they start work

There are only two ways of achieving these very different things: (1) hope that many more people stop claiming benefits and (2) reduce the other benefits available - which are primarily benefits to help disabled people and their families.

For example, the government had declared it intention to take the modest mobility allowance from disabled people living in care homes. This will take £160 million out of the incomes of 80,000 people (£2,000 per person) - who will then be expected to live on just £1,200 per year. However this policy, after a successful campaign, has been reversed [11]. 

It is very encouraging that the first concerted campaign against a specific anti-disability measure was - at least temporarily reversed.

The next stage of the debate will focus on two things: (1) the development of Universal Credit - a simplified system of income support and (2) the development of a Personal Independence Payment - to replace disability specific benefits. Within the framework of these other changes we are likely to see:

  • Efforts to raise the eligibility thresholds and increase tests for disability at every point
  • Reductions in basic income support
  • Reductions in support to carers and families
  • Reductions in the relative value of benefits as they relate to inflation

Disabled people and people with mental health problems are amongst the poorest in the community. These changes will inevitably push them into deeper poverty.

The government target for cutting DLA is £2.4 billion and as DLA is claimed by 3.2 million people this implies that the saving impact on the 1.5 million or more who are most disabled will be over £1 billion [10].

It has also already been indicated that the ILF will be phased, eventually saving a further £0.2 billion. 

Further benefit changes are uncertain, but given that pensions are to be protected then planned savings are likely to come from income for disabled people. Some of this will be done using subtle approaches like changes in indexation which DEMOS predicts will have led to cuts of £6 billion a year by 2015 [10].

A very conservative assumption must be that the government is hoping to make an annual saving of at least £2 billion from this group by 2014 and - phased over time - this would be a cumulative saving of about £4 billion. This represents 16.8% of the cut in departmental savings.

3. Cuts to housing

There are three major budget cuts and regulation changes that will have a major impact on availability of housing to people with learning disabilities: reduced spending on social housing, changes to Local Housing Allowance to meet rents in the private sector and changes to Support for Mortgage Interest. None of the individual cuts or changes in themselves seem disastrous but it is the combined impact of the reduced availability of the three main housing sources - public sector, private sector and home ownership - that will effectively cut off housing choice to people with learning disabilities.

More detail about these changes can be found here.

Supporting People, another central government funding stream of £1.64 billion, which pays for some of the supported people that need to stay in their own ordinary place to live, will be cut by 12% nationally and will lead to cuts of 40% or over in some local areas.

Also the Disabled Facilities Grant which was provided to enable people to adapt their own homes has now had its ring-fence removed.

4. Cuts in employment

The government want to encourage people to work and disabled people and people with learning difficulties want to work. The challenge is to make sure people are better off when they do work and can get the support they need to find and keep work. Currently there is grave concern that planned changes to the benefit system will make work less attractive by reducing non means-tested benefits that are crucial for people being better off in work. 

In addition small, community-based services, focused on supporting disabled people are finding it harder to survive in the face of cuts to local government and the increased control central government is giving to a small number of big service providers.

5. Cuts in our communities

Central government wants to encourage more volunteering and community action. But its policy does not seem to be well thought-through. Cuts have been imposed in a way which almost guarantees that they will fall hardest on the small, innovative and developmental services that are easy to cut even if they are efficient and effective.

For example Dame Elisabeth Hoodless, who is stepping down from leading Community Service Volunteers (CSV), argues that the government's plans are not sensitive to the reality of volunteering:

Does one hand know what the other hand is doing? We know we need to save money, but there are other ways of saving money without destroying the volunteer army. Once you close a library there is nowhere for a volunteer to help... Few people want to be responsible for the library. Most people want to feel there's an expert on the premises. They are quite happy to issue and re-shelve the books, but taking the final responsibility is a bit more than more people want to do.

Currently many of the leading experts in community development, who support the government's view that communities could be stronger and more active, are organising to resist a government policy which seems confused and incoherent.

Innovative self-advocacy organisations closed down

Lambeth Council have cut funding to a low-cost self-advocacy organisation People First Lambeth. These cuts not only silence the voice of people with learning difficulties they will also damage friendships, limit personal growth and reduce the quality of life for very many people. People First Lambeth have made the following film to explain the value of the organisation and the damage that will be done:

  

These cuts were also covered in the local paper.

6. Cuts to choice and control

Given central government's enthusiasm for personalisation, individual budgets and other systems that promote choice and control it may seem surprising to argue that choice and control is under threat. But the rhetoric around personalisation masks a number of trends that take us away from choice, control and an ordinary life.

Institutional developments

In some areas there are still plans to build new large-scale nursing homes and hospitals that signal a return to an age when vulnerable people were hidden in institutions where they often became victims of abuse. Moreover the fact that institutional services are inherently more expensive than community services encourages institutional service providers to congregate more people together in order to try and reduce the per person cost.

One family recently reflected:

Not being able to choose who cares for you is very significant. Big institutions are unlikely to allow this kind of choice. I see many people who live in residential care, they don't seem to have choice about who cares for them. If the carers are shared, pressure from the other service users may mean they have to conform to someone else's choice. I see a huge mis-match between the paid carers and the people they provide care for. This needs addressing. You will never get the best from either party if they are not enjoying spending time with each other. This problem is particularly evident in people with so called challenging behaviour. As a parent of a young man with learning disabilities in this country I have little hope for his future unless the small family he has can provide for him - his brother and I are working to do this. I believe all social care campaigns should be based around support to keep families together. In my experience people placed in residential settings just lose their voice, no one listens, the longer this goes on the quieter they seem to get. Sad, very very sad!

Poor implementation of personalisation

Local authorities already feel forced to restrict people's choice and control and limit the number of local services available. Although this will actually promote inefficiency and waste in the long-run by undermining market pressures, many local areas believe it will create some short-term savings.

This kind of market restriction is happening in several ways:

  • Many people are being told that they cannot spend their individual budgets as they see fit.
  • Local authority contracts are being organised to limit choice and control within local areas.
  • People are being inappropriately denied access to individual budgets and to direct payments.

An advocacy group in Doncaster gave this example to demonstrate the way in which choice is being denied:

Doncaster Metropolitan Borough Council has delegated its functions to Rotherham Doncaster and South Humber Mental Health Trust. However the way that this has happened seems to have led to a situation where people with mental health problems cannot be assessed for social care needs, and subsequently being denied the right to a direct payment or an individual budget.

This matter is currently being reviewed by solicitors.

Failure of law and policy

At a deeper level these problems stem from the failure of central government to address the incoherence of social care law and its inability to provide the right legal framework to make personalisation effective. Local authorities have been left to improvise their own policies in the dark. 

As the Law Commission said in its 2008 Scoping Report:

Adult social care law remains a confusing patchwork of conflicting statutes enacted over a period of 60 years. Some of these statutes reflect the disparate and shifting philosophical, political and socio-economic concerns of various post-war governments. Other statutes were originally Private Members ' Bills and represent an altogether different agenda of civil rights for disabled people and their carers. The law has developed with an inconsistent regard for previous legislation; other repeat or seek to augment previous law; and others can be categorised as stand alone or parallel Acts of Parliament.

Conclusion

The current welfare system is not designed to promote social justice. It is the toy of whichever political party is in power and it is used to try and win political advantage and to stay in power.

The current cuts target disabled people; but this can be hard to see. Statistics and press releases from government try to draw our attention away from the areas of real harm.

I have tried to make the best calculation of the impact of these cuts on the 3% of the population who are most disabled. I know that there are many more issues to explore and it is impossible to accurately predict every change in government thinking or understand every detail of the current system.

If you can see any way of improving this analysis then please contact me directly.

Sources

[1] HM Treasury Spending Review 2010

[2] NHS Information Centre: Personal Social Services Expenditure and Unit Costs 2009-10

[3] Local Government Finance Key Facts: England Communities & Local Government November 2009

[4] NHS Information Centre: Personal Social Services Expenditure and Unit Costs 2007-08

[5] Local authority spending cuts: the impact on third sector organisations and the communities they serve. Yorkshire & Humber Forum, 2011

[6] LASSL (DH) (2007)2

[7] Lost to the System? The Impact of Fair Access to Care by Melanie Henwood and Bob Hudson

[8] Assessment and Services from your Local Council in England, Counsel and Care, 2010

[9] DWP

[10] DEMOS, Destination Unknown, 2010

[11] Don't Limit Mobility, Mencap, 2011


Last updated 29th March 2011

The publisher is The Centre for Welfare Reform.

Unfair Cuts in Detail © Simon Duffy 2011.

All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.