Why the welfare cuts will cost more than they save


by Guest    
February 27, 2011 at 5:08 pm

contribution by Richard Shrubb

I have a friend with a son in receipt of nearly £500,000 a year for his 24-hour a day care. Andy has Kanner’s Autism. He also has very low intelligence and gets angry because he can’t communicate effectively, needing 2-3 people to restrain him.

The family are facing a 35% cut in their Personal Budget, which will almost certainly mean he goes into state care. Yet, the equivalent Local Authority provision cost well in excess of £1.5 million a year when he received care directly from the state. You need staff to administer his daily life as well as those restraining him.

There are other similar examples.

I have looked at a central government cut to a grant called Supporting People (SP). Broadly speaking it is designed to give tenancy support to the vulnerable – keeping them eating well, paying the rent and making sure their tenancy is safe.

It costs £1.67 billion a year and it is taking an average 25% hit in funding. When subjected to a cost benefit analysis by CapGemini, SP was shown to save £2 for every £1 spent.

On the face of it, a 25% cut could result in a net 25% increase in expenditure (above the cost before the cut). Those not in receipt of the support will fall through the net and need extra support.

Another example of this situation is the cap on Housing Benefit. Driving the poor out of London makes them homeless. Fixing the social problems caused by making them homeless will cost more than the savings in Housing Benefit. Those who don’t get social housing will stay in hostel accommodation.

A Bed and Breakfast in Chelsea will cost £500 a week where the same family will cost £1000 a month in Housing Benefit in their own privately rented flat. The person currently employed on a low income will have no fixed abode. They will not be able to work as a result and must take out of work benefits. Life ruined – drug abuse? They have a breakdown? Mental illness and drug rehab costs billions!

The Personalisation Agenda was New Labour’s baby, and is supported in principle by the Coalition. It takes the stance that the recipient of care and support knows what works for them. You get a Personal Budget instead of a package of care.

For example, pay £4000 a year for a Personal Assistant and the disabled person can go to work. This will keep them occupied (and less in need of treatment), off state benefits and giving the state a net income from tax as opposed to a net loss in supporting them, unemployed in the community.

This applies to Andy too, who I mention above. Under the Personalisation Agenda his family set up a Trust to administer the state income, and uses the money in exactly the right way to meet his needs. He still needs 24 hour a day support from 2 members of staff at a time, working in shifts, all this in specialised accommodation.

An old estimate of savings that family carers make to the state was £85 billion a year – money not spent in the first place thanks to the devotion of families to their charges. Yet cut that freedom and they will be unable to achieve their needs, and budgets for emergency care will be sorely tested.

If the Welfare State was just about figures on a spreadsheet, then the cutbacks would be fine. It isn’t – it is about lives, lives that cost more when broken than when in a good state of repair.


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Reader comments


Boy is this mixed up or I’m not getting all my benefits.

The most money I can get for a twenty four hour care package and then apply for the old ILF would be no more then £30,000 a year, I have to pay for a carer out of that, pay the weages, the tax the stamps the holiday pay.

So where do they get £500,000.

Now then saying to me that I can get a carer to work with me which was labour idea did not work, because under labour after a year the employer has to be paid grants and the grants then become the companies responsibility, but if your sitting in a chair in which your carer is doing all the work it does not take much imagination to say employ the carer.

I was told I could go to work in London from Swansea I would get a train fare paid, I would get a carer paid, when I arrived in London I get a taxi, I asked why not allow me to live in London, as it turned out the benefits office worked out the total cost of keeping me employed in London would cost twenty fives times my wages so it was dropped.

The sad fact it’s cheaper to put the disabled onto JSA and leave them there as some of my friends are finding out.

I’m on your side, but £500,000 every year? Surely that’s a mistake? That would pay for about 20 full time carers.

The point of the exercise is not to save money, it’s to disable and undermine the whole of the rest of the population. We’ll be left with an overlords class and a serfs class. The conspiracy theorists will tell you the financial elite has been working towards this for centuries. It’s beginning to look like they’re right.

BB

4. Iagreewithsally

Conservatives are on a Jihad to eliminate the welfare state and they have the perfect smokescreen in the deficit to hide behind to do it. There is no limit to the
amount of other people’s money (tax payer money) they will spend to achieve it.

Like Tom, I’m sympathetic in principle but can’t get my head round that figure of £500,000. Can you give us an idea of how that breaks down? (Even if you were to pay – say – three nurses £40,000 and six carers £20,000 to cover three eight-hour shifts in teams of three, I still don’t see how you’d get close to that sum.)

This article is largely nonsense. Now way does anyone receive £500k pa to look after an autistic child at home; and no way does it cost £1.5m pa for the state to look after such a child. These are fantasy figures.

Supporting People is for housing-related support: it does not cover “paying the rent” – that is covered by Housing Benefit (HB). SP is a huge bureaucratic exercise in which vulnerable people receive as little as £4 pw, while their registered social landlords must supply reams of performance indicators, read piles of “guidance” and face a three-yearly inspection and/or annual desktop reviews – all of which keep well paid SP bureaucrats in largely useless jobs. There simply better and more efficient ways of delivering funding for housing-related support.

And the capping of HB will not drive the poor out of anywhere. HB is a subsidy to landlords, enabling them to charge rents that their tenants cannot afford. Cutting HB will result in rents falling, as landlords will not want voids on their hands.

I think that someone here ( A Provocateur ) is taking the piss to make something look like it is not ! Really £500,000, come on that is stretching it by anyones imagination.

Given the misspelling of Kanner Autism and the author’s linked profile I think this was dictated rather than typed and the scribe misheard some things and didn’t ask for clarifications.

The facts are kept separate from the anecdotes, but it’s still not helpful when they don’t seem typical or realistic and therefore appear to be untrue.

9. Just Visiting

Richard Shrubb’s earlier piece on LC also seemed to contain some significant inaccuracies:

I know a woman who has excelled in life because she says the voice she hears with her schizophrenia can also read. Thus it reads a page and she reads the other page. Two ‘readers’ reading a book and you halve the time of reading.

http://liberalconspiracy.org/2010/09/26/the-media-still-attaches-a-stigma-to-mental-health/

Sinc ewhne do the Tories look after people needing support from welfare benefits?

The 500k figure also includes special accommodation, as well as special furniture (he breaks normal furniture.

I am lucky to know two families with budgets of a similar size. This is no baloney.

Broadly the cost breakdown is thus:

Staff costs. 2 people have to be with him all the time he is awake. You need three to accompany him when he leaves his flat. In emergencies you need 1 to 2 extra people on top of this. With the hidden costs of staffing (tax, NI, employer’s liability insurance etc) you can take the team’s wages and double it.

Staff training is another cost. The staff who work with Andy are already skilled people (like nurses, disproportionately to their pay) yet they require on the job training. As with anyone who may have to deal with an emergency – from fighter pilots to nurses – you have to be able to respond immediately and to the right degree to a problem.

Administration of a budget the size of a good size company has its own costs.

Thanks to his disability, he needs specialised housing. The rent for his home is £800 a week. Housing Benefit is already capped well below this, and his budget must meet the excess. You need to have modifications to the building to accommodate his needs. Furniture gets destroyed in tantrums on a very regular basis – they always buy second hand but this is a regular occurrence.

The budget is given according to his ‘assessed needs’ – Social Services assessed his budget at the £500 000 a year.

State care is not tailored to his needs. It is a one size fits all approach. Andy gets unhappy and kicks off? You need more staff working on an emergency basis. In his case they assessed his need as 6-1 care, 24 hours a day – by fully qualified staff. Night workers get a higher rate of pay. They cost. With an autistic person you need to introduce someone to them slowly and gently. It can take 18 months (if at all) for them to accept you. So, ignoring this, the state threw in agency staff which unsettled him even more and the tantrums grew in number and intensity.

By designing a care package around Andy, so he is comfortable and happy. He doesn’t kick off. Keep Andy happy and save a million quid a year.

I should state the mother of Andy will be reading this at some point today. The mother of the other adult receiving a similarly sized package will be reading this also. She isn’t being kicked about, but Andy’s mother is. Funny how the system works – inconsistent throughout.

I have just shown this to my benefits adviser and she said it’s not something you get from benefits, or from the councils assessments payments.

They said this person must be in some sort of charity payments, and she said she knows lot of people like this, who get nothing at all except income support.

Now then the idea that carers will cost a fortune they do I know, I have two carers paid for by my care assessment you can only get £28,000 I have to pay tax NI stamps and insurance, plus Holiday pay sick money all out of this, but thats it I cannot get anymore.

So if this lad is getting that much money then he getting something beyond benefits.

I also live in a specially adapted home.

So these figures are for real? I was seriously starting to question whether an extra ’0′ had got in there by mistake.

Jeez. I’m as much of a Tory-hating bleeding-heart liberal leftie as the next man, but I cannot in all honesty say that it seems unreasonable of the Government to think that it ought to be possible for this family to provide their son with suitable 24-hour care in a suitably-adapted home environment for £325,000 a year (= (say) £100,000 for home adaptations and special furniture/equipment plus £225,000 for a round-the-clock team of six carers).

As it stands this article is music to the Daily Mail’s ears; it suggests that severely disabled people are routinely receiving hundreds of thousands of pounds a year to cover the costs of specialised equipment and round-the-clock care, when the reality for many of them seems to be that they’re struggling to pay for the basics (like mobility equipment and someone to come in and help them bathe or cook).

Sorry, that last post was written before I’d read Richard’s and Robert’s comments. Still none the wiser though, given the apparent contradiction between them.

If a person is severely and I really do mean severely disabled with a breathing tube or say with a massive illness like our beloved Mr Hawkins then of course extra funding becomes available. A nurse will cost you £175 a day.

A specialist nurse will cost you £300 a day but these are provided.

What i think is happening here is they are taking all the cost of everything, not what he actually gets.

Even if the figures provided by R Shrubb are anywhere near accurate, then presumably they are costs to the state – not benefits directly to the afflicted individual.

More importantly, how does he reach his absurd figure of £1.5m pa for the state to take care of such individuals in an institution? Surely, there are economies of scale in such care? You could only reach such a figure by discounting all the care provided by relatives even to institutionalised individuals. And, as someone who works in the care industry, I can say that very few people ‘dump’ their relatives on the state – they are often there helping and supporting, and raising finds for extras.

R Shrubb’s thesis is that “welfare cuts will cost more than they save”. On the basis of the evidence provided, this claim simply does not stand up! Case unproven. (Sunny, you really must decide whether your site’s focus is propaganda or analysis!)

@4:
“Conservatives are on a Jihad to eliminate the welfare state and they have the perfect smokescreen in the deficit to hide behind to do it. There is no limit to the
amount of other people’s money (tax payer money) they will spend to achieve it.”

No, they are not; and, please, do grow up. I have worked for several Conservative-controlled local authorities, and in no way do they want to “eliminate” the welfare state, deficit or no deficit. The Coalition is cutting public expenditure back to 2006/7 levels. There are arguments to be made against this, but yours is not one with any weight.

@17

“The Coalition is cutting public expenditure back to 2006/7 levels.”

Yes; but a higher proportion of that spending is now needed to pay for pensions and debt interest. Spending on public services is actually returning to 1999/2000 levels (i.e. the levels Labour inherited from the Major government). Given what schools, hospitals, crime rates etc looked like in 1999, that does not strike me as something to feel relaxed about.

And hyperbole about a ‘Jihad to eliminate the welfare state’ aside, it seems reasonable to suppose that as a broadly right-wing party, the Tories would tend to favour a smaller welfare state alongside greater charitable and private provision of many of the things we currently rely on the state for (pensions, healthcare etc). As such there is a very real tension between guiding Tory principles and the existence of a universal welfare state as we know it in the UK; a smaller ‘safety net’ model targeted at those who can’t afford private services or access charitable services is much more in tune with Tory values.

@18
We can argue indefinitely about %s; but, basically, the reduction in funding is not that great. I work in social services (charity contracting to state); and I know there are huge savings that could be made. Believe me, in my sector, few will suffer! Indeed, many of us regard the Labour Party view of money-no-object-so-subsidise-inefficiency with utter contempt!!


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