Response to the consultation on changes to the allocation formulae for three social care grants

The Department of Health (DH) consulted on changes to the allocation formulae for three social care grants: the Learning Disability Transfer Grant, Preserved Rights Grant and AIDS Support Grant for implementation from 1 April 2011. Although the decision about whether these grants should continue in their current form or if they should be brought into Formula Grant will be made in the spending review, DH nonetheless decided to consider changes to the way these grants are calculated prior to the spending review outcome.

London Councils has responded to the consultation on the specifics but has also taken this opportunity to highlight wider issues relation to the relative needs formula (RNF) and its distributional effect on London.

The main elements of London Councils’ response are:

Learning Disability Transfer Grant – London Councils agrees with DH’s preferred option to distributing funding based on 2010-11 reported transfers between primary care trusts (PCTs) and local authorities (Option LDT1) as we believe this option is a more appropriate method of distributing funding in comparison to the RNF (Option LDT2) as reported transfers figures are carefully negotiated and agreed upon by both local authorities and PCTs, whereas the RNF is a highly volatile option.

Preserved Rights Grant - London Councils agrees with DH’s preferred option to distribute funding on a caseload basis but using updated client data from 2009 multiplied by Area Cost Adjustment (Option PR1). This option is a clear representation of the number of people per borough who fall under the preserved rights category, whilst the RNF (Option PR2) does not reflect this and creates erratic winners and losers in London.

AIDS Support Grant - London Councils agrees with DH’s preferred option to distribute funding using the Frozen Caseload Data (Option ASG1) as we believe using the RNF (Option ASG2) to distribute funding does not properly reflect where the costs to local authorities fall and would mean London would be susceptible to a dramatic and unreasonable loss of funding.

London Councils has also taken this opportunity to urge the government to undertake a full review of the Adult’s Relative Needs Formula, acknowledging the issues raised in our response in regards current formula (which fails to reflect the unique levels of need in London) and growing social care cost pressures in London, so that any new formula fairly reflects real cost pressures in London and elsewhere.

A copy of the full response is attached below.