Social Services Warned to 'Brace Themselves' for the Coming Recession

Association of Directors of Adult Social Services
Date: Monday October 20, 2008
Embargo: 00.01 hrs Wednesday October 22, 2008

Adult Social Services Departments were warned today to brace themselves for 'significant and substantial' increases in the number of people being referred to them during the coming year. According to ADASS President John Dixon: "all the pointers are showing red alert.

"The impact of a swift, sudden and unexpected recession is bound to affect the poorest worst. And the most vulnerable hardest. Extreme economic depressions always have led to serious social tensions within families and communities - and this one will be no exception.

"There is very strong evidence that these circumstances will inevitably have negative impacts on family relationships, child development and overall health and well-being. It goes without saying that these severe additional pressures come at a time when social care budgets have been squeezed, cumulatively, over the past three years. And when there is little prospect of additional funds from either national or local taxpayers in the short to mid-term."

Among the 'sobering facts causing concern', Mr Dixon pointed to:

*  An increase in mortgage re-possessions by more than 48%. Lenders have estimated that more than 45,000 borrowers could lose their home by the end of this year. According to John Dixon: "Some local authorities are already seeing an increase in the number of people making inquiries about social housing availability."

* Ssles of homes are at their lowest for 30 years, and average house prices have fallen by over 10% this year (equivalent to £23,000 for the average home). Meanwhile mortgage lending is down 36% on last year, and falling. Forty per cent of new mortgage offers are being withdrawn.

* Fuel poverty has increased to 3.5 million households and beyond within the past few weeks.

* Property crime is beginning to rise, according to reports beginning to emerge from the Association of Chief Police Officers and individual councils.

* Unemployment has risen to some 1.8 million - the highest for a generation.

Mr Dixon added: "These concerns have been deepened by the collapse of the Bradford and Bingley Building Society who specialised in lending to individuals and consortia operating in these areas.

"In our corporate roles directors will be discussing with colleagues how local authorities can support people in their communities - for instance by providing advice on debt management, benefits entitlements, and ways of helping to reduce fuel and heating costs. There will be other ways, too, in which we can help relieve some of the pressures on people who rely on us for care, support and advice."

Meanwhile, in an article in the latest edition of the Association's journal*, Bill Hodson, co-chair of the ADASS Housing Network, has warned of the impact that the `dramatic downturn' within the housing economy might have on social care services - not least the vastly increased pressures that will brought to bear on homeless people.

* The building of new homes is at its lowest level for 60 years,
* More aspiring first time buyers will continue to occupy rented housing leading to less throughput,
* More people will lose their homes due to arrears of rent or mortgage and the supply of new homes will start to slow down,
* Moves within socially rented housing will slow down leading to longer waiting lists and homeless people spending longer in temporary housing and bed and breakfast accommodation.
* The supply of supported housing schemes held up or even jeopardised where they were part of a cross-subsidy scheme on a private development e.g. an extra care housing scheme.

He acknowledges that a number of proposals have been announced over the past three months. These fall into the broad categories of:

* Stimulating the housing market by raising the stamp duty threshold for a year
* Supporting would-be buyers to purchase new homes - through the latest scheme Homebuy Direct - which would provide an equity loan, free of repayments for five years, to discount the market price by 30 percent,
* Supporting people in mortgage arrears by increasing the entitlement to benefit from 13 to 39 weeks and by a mortgage rescue package whereby a registered social landlord would purchase the home and let it back to the occupier.

However, Mr Hodson warns that "the details of most of these initiatives have yet to be announced and opinion is divided on how effective they will be.  Two things, though, are certain: local councils will be expected to take an active role in supporting their citizens through this housing credit crunch. And this problem is going to be with us for several years to come."

ENDS

For further details contact:
John Dixon, President ADASS, 01243 777660
Drew Clode, ADASS Policy/Press Adviser, 020 8348 5023/07976 837755

* Directors of adults social services and children's services are gathering this week in Liverpool for their annual conference. Children's, Schools and Families' Secretary Ed Ball is due to speak on Thursday October 23, and Health Secretary Alan Johnson is speaking on Friday October 24