The week in public services — 22nd August 2018

This week: Government takes over a private prison in Birmingham; latest social care funding proposal met with scorn; and the “silent crisis” in children’s social care

This is a non-comprehensive overview of what is going on in public services by the performance Tracker team at @instituteforgov. Did we miss something important? Let us know below.

Before we start: a rare bit of good news for Philip Hammond. The latest ONS public finances stats show that borrowing in July this year is 40% lower than July last year — below that which the OBR expected it to be — owing to an less spending and increased tax receipts. But on the flipside, this might make it harder for Hammond to get the Cabinet to agree tax rises to pay for an increase in NHS spending…or face down calls for more spending. The analysts at the OBR are worried that the seeming improvement may simply be because of the timing of UK payments into the EU budget, and provisional department spending forecasts, however.

Local Government

In local government, Torbay is the latest council with concerns about a section 114 notice. On course to overspend its annual budget by nearly £3 million, the council has introduced a moratorium with restrictions on non-urgent spending worth more than £1,000. Chief executive Steve Parrock pointed to pressures in children’s services to explain the rise, with a substantial increase in looked after children and agency staff increasing spending on children’s services by 10% to around £32 million.

Sometimes, a bit of distance brings a new perspective to bear on an issue. Northamptonshire has hit newspaper frontpages…in a different country. The New York Times has a good longread outlining what happened in Northamptonshire, making the case for it being a political turning point for Conservative MPs and voters’ views of austerity. A PwC report commissioned for councils in Northamptonshire estimated that restructuring — the Government’s preferred reform — might make some savings, but they won’t be enough. Restructuring “will not lead to the creation of two new [financially] sustainable unitary local authorities […] and risks only redistributing the existing financial instability across two new organizations”, they argue.

CIPFA president Rob Whiteman maintains that, despite pressures, local councils shouldn’t plan on the basis of any extra funding being announced in the Spending Review. Dan Bates argues that judging council sustainability requires looking at qualitative, as well as quantitative indicators, of financial resilience.

Outside the world of Microsoft excel, libraries have been one key service which has been affected by spending cuts — but here’s a question: are people using libraries more or less than last year? DCMS have found that the declining trend in library use since 2010 is starting to slow down, though warn the data underlying this is questionable.

Children and Young People

A-level results aside, it’s been a quiet week for schools. The Department for Education and Ofsted apparently disagree over new inspection plans, with the Department worried that a new school inspection framework will divert time and resources away from Damian Hinds’ priority of reducing teacher workload.

In children’s social care, it’s been a remarkably noisier week. Alison Michalska, director of social care at Nottingham, lays out the local government fiscal challenge and its implications for children’s services.

Pawda Tjoa at the New Local Government Network has looked at Cafcass data on children in the court system to measure demand for children’s services. Unsurprisingly, there has been an increase over the last four years — but also an increasing share of older children in care applications. An under-appreciated point.

And the Social Market Foundation are arguing that there is a “silent crisis” in children’s social care, on the basis that 47,000 looked after children are placed with local authorities deemed “inadequate” by Ofsted. They also find significantly worse long-term education and employment outcomes for looked after children, although they cannot attribute this to the care system itself, or the characteristics of the children entering it. They helpfully summarise lots of interesting research on how the care system interacts with other public services.

They recommend: making sure care does not exacerbate children in care’s issues and providing “proactive services” to help children in care catch-up with children not in the care system. To do so, they want central Government to monitor performance more closely, and hold themselves accountable for improvement. Their points about the lack of data on the activity and effectiveness of foster care, and public/private provision are well-made. A consistent way of tracking performance (and ideally spending too) over time, you say? We’re listening…

And despite two recent foster care reviews, Martin Barrow argues that not much has changed — there will be no employment status for foster care, for example. He argues that there are six simple and implementable reforms the Government could endorse to improve foster care.

Health and Social Care

A fairly quiet week for health announcements. The British Medical Association have publicly warned the Government about a no-deal Brexit outcomes for NHS, which they argue would affect: EU staff’s ability to work in the NHS, medicine supply, and reciprocal health arrangements.

Mike Nosa-Ehima at Kings Fund lays out the quantitative evidence pointing to workforce problems amongst GP trainees — only 21.7% planned to work full-time after qualifying. The main reasons why GPs say they don’t want to work full-time tend to be: the workload, increased patient demand, and “insufficient staff in general practice”.

In social care, a new report from Localis finds that councils have managed to largely maintain public satisfaction with most care services.

The bigger story, though, is that someone’s having fun leaking. On Sunday, the Telegraph trailed new social care plans kicking around the Treasury: a care ISA exempt from inheritance tax. The great-and-good (read: sensible) have thrown a lot of scorn on this idea. Sarah Wollaston, Chris Giles, and Steve Webb, have all come forward to make the obvious (and important) point: a care ISA doesn’t pool risk. If you can’t afford to save for retirement, you won’t benefit from it.

As the prevalence of illnesses is effectively randomly distributed later-in-life (i.e. no-one can forecast how much care they might need), any viable solution to funding social care will require some kind of insurance mechanism. Fiddling with incentives at the margins to get people to save more on their own doesn’t address this.

A care ISA exempt from inheritance tax may even be unsuccessful on its own (limited) terms. Paul Lewis points out that those who have ISA or savings will probably use them to pay for care anyway, so making a care ISA exempt from inheritance tax will probably just prove to be a tax-break for the already-wealthy who use the ISA but don’t end up facing high care costs.

Given everything we know about how hard it is to get people to save for retirement already, making it mildly more attractive for the very wealthy to save for unpredictable care costs they have limited control over seems ill thought-out. A better approach, as we’ve argued before, would be to use a parliamentary inquiry to build the space to take the tough political decisions that funding social care will require.

Law and order

Last Friday, Rory Stewart announced a (new) £10m pilot to trial new ways of improving standards and security in 10 prisons which have struggled with acute drug, violence, and building issues. The Howard League are positive about increased funding, but think it should be targeted at building better relationships between staff and prisoners, rather than “locks, bolts, and barbed wire” — and that the Government needs to reduce demand by reducing the prison population.

He also took explicit responsibility for drugs and violence in prisons last Friday, promising he will “resign in a year” if he hasn’t managed to reduce drugs and violence levels in 10 target jails. He refused, however, to add Birmingham to the list of prisons he made himself fully accountable for improving.

On Monday, he announced that the Government will be temporarily taking over Birmingham prison, at present run by G4S, after inspectors said they had “no faith” in current management to improve. You can literally see G4S shareholders balk at the news, although share prices recovered quickly. The Government will bring in a new governor, new staff, and reduce jail capacity by 300 spaces. A sign of change?

But Birmingham is not unique — the problems affecting the prison service are nationwide — as Alice pointed out on twitter. Alan White argues, as with several recent outsourcing controversies, the story stems back to decisions made by Chris Grayling. Hardeep Matharu makes a good case that the problem is a systemic lack of accountability, rather than privatisation per se. Bob Neill, the chair of the Justice select committee, thinks that the Prisons Inspectorate needs more powers to enforce its recommendations — only 14 of its 70 recommendations for Birmingham were achieved before its recent inspection.