3.2 The perceived risks
Demand variation
Councils evaluating their options and embarking on reorganisation need to be aware of the potential risks and costs posed to people-based services by LGR. Reorganisation proposals, including the aggregation of existing unitary councils, will create new authorities with new demand profiles and cost-bases, and will change the interaction and relationships with care markets and wider public service providers. Previous research by CCN and PwC has shown that the population of new unitary council areas will have the single biggest impact on the potential efficiency savings from unitarisation in England, due to the costs of splitting up and duplicating social care services into multiple smaller councils. CCN analysis of PwC data showed that replacing the 21 existing county councils with 58 new unitary councils based on a population threshold of 300,000 would create £3.7bn of disaggregation costs over five years, including £501m of permanent disaggregation costs. In contrast, creating 29 unitary councils based on a minimum population of 500,000 would reduce disaggregation costs to £1bn over five years, with £134m of permanent disaggregation costs. 8 However, officers engaged through this programme were clear that the challenges associated with disaggregation encompass a host of wider issues which are likely to impact the quality and efficiency of people- based services on an ongoing basis, beyond the one-off impact of reorganising. The risks identified through this engagement included: 7
Demand profiles are highly varied across county areas . Disaggregation may concentrate high levels of demand in certain areas, driven by variation in deprivation, access to other services, and demographics. Unless this is well understood, stakeholders engaged were concerned that this poses a significant sustainability risk if there are insufficient resources to meet current and future levels of demand.
Care supply
Uneven distribution of demand and care supply is perceived to create significant risks relating to placement sufficiency , and ordinary residence when disaggregation occurs, and responsibility for a person’s care is attributed to their current placement address, and this falls into a different unitary authority than their original home address. This is expected to cause a mismatch in care supply, demand, and capacity in new authorities, introducing additional cost, operational and administrative complications, and costly legal disputes.
Cost of providing care
The unit cost of commissioned care is expected by officers to be affected by scale and disaggregation - stakeholders were concerned that disaggregating existing authorities into smaller authorities may reduce purchasing power and increase the cost of commissioned care.
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