England & Wales Health and social care

Improving value for money in adult social care


This Audit Commission’s Improving value for money in adult social care report describes the demographic and financial pressures facing adult social care.

Based on a range of adult social care data, it identifies the measures that councils are taking to make efficiencies and sets these within nine categories: procurement, prevention, back-office, staffing, changing the balance of care, personalisation, partnership, assessment and care management, and charging.

As yet no council has addressed all these areas and only 20% have considered efficiencies in between six and eight categories. Councils are tending to use ‘tried and tested’ measures to achieve short-term savings, but now need to look to innovative ideas and ‘large-scale transformational change’ to make a big difference.

This briefing is available in full to all officers and elected members of LGiU member authorities.


Funding and activity

The report identifies that spending on adult social care increased in real times by nearly 16% between 2003/04 and 2009/10 with an increase of 33% on adults with learning disabilities. Productivity based on ‘crude measures’ of activity fell, but reasons for this could include better prevention to keep people out of services and current eligibility criteria being applied more rigorously meaning that a smaller number of people with high needs are receiving services.

There is a wide variation in unit costs and patterns of service between authorities indicating considerable scope for improvements in efficiency. For example, weekly unit costs for residential care for learning disabilities in the independent sector range from £612 to £3,000 with a median of £1,300. For older people the range is from £330 to £907 with a median of £455. However, again there may be valid reasons for some of the variations. For instance, an authority with very high unit costs for learning disabilities may have good community alternatives leaving only people with the highest needs in residential care. The importance of robust collection and analysis of data is emphasised. Councils are directed to the Audit Commission’s online value for money profiles which allow the comparison of council data.


85% of councils reported efficiencies from improved procurement practices which include the following.

  • Renegotiate terms or unit costs.
  • Tender for new suppliers. A large-scale example is Trafford Council which released savings of £3.4 million over two years through measures to shape the social care market with approved providers for people using personal budgets.
  • Impose a standard framework for reviewing contracts.
  • Revise contract monitoring arrangements. 12% were using electronic monitoring of home care in which providers are paid for the hours provided not commissioned – e.g. South Gloucestershire reported reducing the home care budget by £250k by electronic monitoring.
  • Involve local people in contract monitoring – Trafford developed a Citizen Assessor Scheme in which volunteers take part in reviews, evaluate tenders, interview potential providers and conduct on-site visits.
  • Use the care funding calculator.
  • Outsource – 21% of councils were outsourcing. Most were shifting home care to the independent sector with in house provision focused on reablement, some were transferring residential care to the independent sector.
  • Carry out a targeted review of high cost packages of care – Hertfordshire projects efficiency savings of around £9.5 million over two years in learning disabilities through reducing high-cost fees, increasing supported-living in-county and introducing individual budgets.
  • Introduce collaborative procurement – 15% were using this, most commonly in procurement clubs with other councils or joint commissioning with PCTs e.g. six West London boroughs project a combined saving of £4million by 2011/12 through a joint tender and contract framework for home care.

Assessment and care management

The report indicates that 32% of councils were reviewing and improving their assessment and care management processes in the following areas.

  • Apply eligibility criteria consistently.
  • Reduce assessments that do not result in a service.
  • Review key processes, for example through a lean review.

The Audit Commission will consider assessment and care management in more detail in a future briefing.


70% of councils reported making efficiencies through preventative services. Two types of service were involved: primary prevention e.g. small repairs, social activity and early intervention e.g. reablement and telecare targeted at people at risk of needing more intensive support. Very few councils indicated that they had made efficiency savings through primary prevention. 54% made efficiencies using reablement and intermediate care. Of the 81 councils citing reablement as an area for efficiency, 18 identified savings ranging from £143,000 to £900,000 and seven found that people needed less or no subsequent care. 20% of councils used assistive technology and 12% equipment and adaptations to achieve efficiencies.

The report gives the example of Southwark Circle – a membership community network of older people providing mutual support and skills. Set up with an investment of £1 million, the network is expected to become self sustaining in three years.

The Audit Commission comments on research into preventative services. It indicates that further research is needed to demonstrate the cost effectiveness of primary prevention. On reablement, the report identifies that many councils state they have made savings in this area, but the research is less conclusive. It also suggests that targeting reablement at people with acute rather than chronic health problems is likely to bring more benefits. The Department of Health whole-system demonstrator site evaluation due for publication later this year should provide a guide to potential savings in assistive technology.


45% of councils have either used or intend to use personalisation as a driver for better value for money, but with improved outcomes rather than savings. The potential for savings in this area mainly comes through improving processes, and councils should consider the following approaches.

  • Increase the take-up of personal budgets (better outcomes for the same resource but individuals can make better use of resources and may require less money to meet their needs).
  • Manage the social care market to ensure a range of services are available for people to buy.
  • Improved analysis of financial data leading to decommissioning poor high-cost packages, and recovery of unused funds.

Changing the balance of care

42% of councils reported efficiencies by shifting care from residential to community settings. The number of care home weeks funded by local authorities fell by 10% from 2005/06 and the real-terms cost fell by 4%. The shift is happening – but slowly and there are big variations; for example, the average council spends just over half of their older people’s budget on care home placements but this varies from 20% to 70%. There has been a greater shift to community services for people with learning disabilities, but there are still variations – due to historical legacies of long-stay hospitals and different strategic emphasis in councils. In seeking efficiencies, 15% of councils had reviewed traditional day service provision and 11% had highlighted the need for increased provision of extra care housing. Councils should consider the following approaches.

  • Commission strategically.
  • Move to community-based provision of care.
  • Invest in housing such as extra care.


40% of councils either have, or intend to use partnership working to achieve efficiencies through measures such as co-location of services, and integrated operational teams or management arrangements. Joint commissioning with the NHS was less likely to be identified as way of achieving better value although there were exceptions. For example, an intermediate care pilot in Nottinghamshire avoided costs of £200,000 and will be rolled out across the county. The Audit Commission indicates that system-wide savings across both health and social care and avoiding ‘cost-shunting’ will become increasingly important. Good evidence about the impact of cross-system interventions is limited, and the Audit Commission will consider this in a future briefing. Councils should consider the following.

  • Co-locate services.
  • Integrate operational teams.
  • Jointly mange services or teams.
  • Jointly commission services.
  • Efficient continuing healthcare arrangements.


13% of councils reported making savings through changes to charging policy and processes. 6% of councils increased charges in 2009/10, but the Audit Commission excluded this information, stating this is a way of increasing income rather than making efficiencies and that increased charges can have a negative impact on people who use services. Councils should consider the following.

  • Review charging policy and ensure it is consistently applied.
  • Improve debt recovery practices and recovery of unused funds.
  • Develop welfare advice to maximise peoples income – one council identified an extra £2.2 million of benefits.


48% of councils made savings through changes to staffing – ranging from blanket measures such as recruitment freezes to negotiating more flexible working. Councils should consider the following measures.

  • Review the skill mix of the workforce.
  • Restructure management positions but protecting front-line staff.
  • Reduce the use of agency staff.
  • Manage vacancies e.g. only replacing staff who leave where there is a business case to do so.
  • Manage sickness absence.

Back office

56% of councils reported savings through back office changes including the following measures.

  • Manage assets including buildings – selling disused or underused buildings and transferring staff.
  • Set up modern working practices e.g. hot desks and flexible working.
  • Restructure support roles e.g. back office and customer contact.
  • Reprocure IT, supplies, utilities, stationary and transport.
  • IT efficiencies through better information and less staff time inputting data.

Overall, this report provides a useful checklist for councils to identify whether they are taking all opportunities to make efficiencies. It also allows councils to see which areas other councils have focused on. It acknowledges the intense pressures facing councils at this time of reduced funding and points to the importance of the Dilnot Commission report (expected in July) for establishing a sustainable basis for the future funding of adult social care.

In terms of a list of opportunities for efficiency savings, the report is not fully comprehensive. It should be considered alongside the Association of Directors of Adult Social Services (ADASS) whole-system approach to making the best use of resources published in January this year. This paper summarises the key components of a system designed to make the best use of available resources and how to assess whether each component is working effectively. The Department of Health’s 2009 report on the use of resources in adult social care also remains pertinent.