Impact of the csr etc welcome to the new world sue harvey february 3rd 2011
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Impact of the CSR etc ….Welcome to the New World Sue Harvey February 3rd, 2011 PowerPoint PPT Presentation


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Impact of the CSR etc ….Welcome to the New World Sue Harvey February 3rd, 2011. [email protected] Welcome to the New World. Economic & Fiscal Environment All Change Regulation Local Authorities Supporting People Housing Benefit & Universal Credit Rents & Tenure

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Impact of the CSR etc ….Welcome to the New World Sue Harvey February 3rd, 2011

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Impact of the csr etc welcome to the new world sue harvey february 3rd 2011

Impact of the CSR etc

….Welcome to the New World

Sue Harvey

February 3rd, 2011

[email protected]


Welcome to the new world

Welcome to the New World

  • Economic & Fiscal Environment

  • All Change

    • Regulation

    • Local Authorities

    • Supporting People

    • Housing Benefit & Universal Credit

    • Rents & Tenure

    • Investment Model

  • Opportunities

  • Challenges


Economic environment

Economic Environment

  • Housing market wobbling

  • Banks gone all responsible, less lending

  • Financial crisis continues, sovereign debt, Euro

  • Globally ‘co-ordinated’ fiscal consolidation

  • UK deficit deemed too high by all parties

  • Bonfire of the quangos


Fiscal environment

Fiscal Environment

  • New Government in a hurry to reduce deficit

  • Emergency Budget, CSR, Localism Bill

  • Abolish first, consult later

  • Eye-watering spending cuts. IFS:

    • Tightest squeeze on total spending since WW2

    • Tightest squeeze in public services since 1975-80

    • Tightest NHS settlement since 1951-56

    • Largest cuts to working age welfare benefits ever


All change regulation

All Change: Regulation

  • TSA & AC are toast, HCA funds slashed

    Stays:

  • Consumer regulation, setting standards

  • Economic regulation preserved in full

    • Implicit guarantee, no loss on default, funder confidence

  • Strong step-in powers in case of failure

  • Right to commission inspections (far fewer)

  • Co-regulation, accountability to tenants


All change local authorities

All Change - Local Authorities

  • Very significant cuts -28% over 4yrs

  • Front end loaded, really really big hit 2011/12

  • Most targets & ring-fencing removed

  • Key partners under extreme stress

  • Cut what quickly can, rather than what should

  • Radical efficiency: easyCouncil, merging functions, sharing execs, outsourcing


All change local authorities1

All Change - Local Authorities


All change supporting people

All Change - Supporting People

  • V. competitive last 5yrs. Margins low / negative

  • 1st ring fence removed in April 2009 - LAA

  • CSR ‘protected’ SP, cuts of ‘only’ 12%

  • BUT 2nd ring fence removed

  • Part of formula grant from next year

  • Different distribution mechanism


All change supporting people1

All Change - Supporting People


All change supporting people2

All Change - Supporting People

  • Announced, intended, considering, discussing ….

    • Nottinghamshire -67%

    • Southwark -50%

    • Nottingham City -43%

    • Cornwall Council -40%

    • Hartlepool Council -30%

    • Somerset -18%

  • NatFed Survey of Has re LA intentions

    • 73% already indicated > 12% cuts

    • 41% expecting > 20% cuts

    • 18% expecting > 30% cuts


All change supporting people3

All Change - Supporting People

  • No changes to statutory obligations

  • Most SP client groups seen as low priority

  • Prevention always suffers in hard times

  • Keeping people out of residential care remains a priority but tenure neutral

  • As lines with social care blur, floating support looks more & more like domiciliary care

  • Wages & T&Cs driven lower still


All change supporting people4

All Change - Supporting People

  • CIH-LGA Dec 2010

  • Service Reconfiguration & Decommissioning

    • Excess costs largely already driven out

    • Personalisation & choice

    • Voluntary & community groups

    • Reconsider sheltered / older people

    • Reducing #contracts, subsuming services

    • Larger generic floating support contracts

    • Short term services, moving clients on & through


All change housing benefit

All Change – Housing Benefit

  • Emergency budget

    • Caps to LHA & total benefits (some re-thinking?)

    • LHA up-rating moves from RPI to CPI

    • -10% if JSA>1yr

    • Significant increases in non-dependent deductions

  • CSR

    • LHA Single room rate 25yrs -> 35yrs

    • LHA moved from median to 30th percentile

    • Caps to total benefit for working age, HB to ‘take the strain’

  • Combined impact with ESA & CTB

  • Exempt accommodation review ongoing


All change universal credit

All Change – Universal Credit

  • Its on its way

  • Welfare reform white paper: detail still missing

  • Wherefore art thou new rent settlement?

  • Central govt or local govt administration ?

  • Retain rent direct to landlord. All / vulnerable ?

  • Limit ability to shift back to HB+service charges?

  • Where will advice come from?


All change rents tenure

All Change - Rents & Tenure

  • New ‘affordable rent’ = up to 80% of market rent

  • Capped at LHA, (->30th decile)

    • Doesn’t work for much of country, larger homes

  • Proportion of re-lets – up to 25%, up to 50%?

  • Frequency of re-calibration - rents go down as well as up

  • Affordable for whom? Still LA nominees from waiting lists

  • Intensifies disincentives to work

  • Tenure drift over time, who provides for the poorest?

  • Geographical drift over time, mixed communities?

    • If HB costs begin to rise, expect an adjustment

    • How does it work for move-on?


All change investment model

All Change - Investment Model

  • Lot of detail still to emerge

  • Something for something deal

  • Short tenures, 80% market rent, relaxed on disposals

  • Complex LA negotiations

  • Financial capacity @ little or no grant?

  • Very different risk profile – how will funders respond?

  • Only few large deals, yet big HAs cautious

  • Developing for Support becomes ever more difficult


Opportunities

Opportunities

  • High end care more protected, but crowded

  • Mental health strategy, prevention & CBT

  • LAs, NHS looking for efficiencies & solutions

    • More outsourcing of retained provision

    • GP commissioning

    • But competition from provider staff start-ups & FTs

  • Community run, community owned, volunteerism

  • Social enterprise model

  • Anything that can evidence prevention saves money

  • Anything that gets people into work

  • Self payers & top-ups with GN residents


Challenges

Challenges…

  • Don’t whine, play to New Localism & Big Society

  • Identifying hardest hit of service users & residents

  • Benefit reform limits HB ability to re-absorb support

  • Stepping in to fill LA retreat? Can’t do everything

  • Shrinking effectively becomes key skill, incl. Central costs

  • Look again at scale & geography

  • For Groups:

    • Lots of competition for use of surpluses

    • Hard questioning of commitment to support

    • Contribution to overheads vs subsidy

    • Exit is an option many are considering


Sue@campbelltickell com

[email protected]


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