Social care is facing its biggest funding cuts in decades as the government prepares to announce its comprehensive spending review today.

Government spending on councils in England looks set to be cut by at least 25% in real terms from 2011-15 while block grants to Scotland, Wales and Northern Ireland will also be slashed.

Adult social care

There was positive news for adult social care on the eve of the spending review with reports that cuts to adult social care in England could be mitigated by an extra £2bn in funding for councils, which spent £14.4bn on the service in 2008-9.

However, this transfer is unlikely to be enough. Councils face a real-terms reduction of about £5.8m in annual resources by 2015, theAssociation of Directors of Adult Social Services warned in its submission to the CSR.

Certain client groups, such as people with HIV/Aids, could also be particularly badly hit as the government plans to radically reduce the number of grants it gives councils for specific purposes.

This context has led councils to start making cuts to services before Osborne’s announcement.

An exclusive Community Care survey, published last month, found 80% of authorities would no longer be meeting service users’ moderate care needs by next year, due to increases in eligibility thresholds.

Many councils have also announced plans to raise charges for care users for services including domiciliary care, day centres and meals on wheels.

Care services minister Paul Burstow has slammed such pre-spending review cuts as premature, however Adass has said councils’ actions were understandable in the light of ministers’ own statements on the spending review.

Children’s social care

In children’s services, councils are waiting eagerly to see if lobbying from the Association of Directors of Children’s Services and children’s minister Tim Loughton on creating a ring-fenced grant for early intervention has been successful.

If such a grant is not made then government plans to protect the schools budget in England will come at the expense of early intervention or prevention work by children’s social services. Statutory obligations around children in care and child protection gobble up the majority of children’s services budgets and most economic experts believe councils will have no choice but to cut early intervention projects, despite the increased costs of this strategy to councils in the long-run.

In anticipation of the CSR, some councils, including Gloucestershire and Southampton, have already started cutting early intervention projects, but others such as Birmingham are trying to protect early intervention services that they have already invested heavily in.

Social care workforce

As labour costs account for a large part of spending on social care, big cuts are likely to translate into significant job losses and with real terms cuts to pay and benefits.

Big job cuts are yet to be felt, yet councils across the UK have started taking action to reorganise their workforces to reduce costs while meeting policy agendas such as personalisation.

At Cheshire East Council, bosses have decided to replace 40 qualified social workers with unqualified staff in a restructure in February.

In another efficiency drive, Glasgow Council is replacing experienced social workers with call centre staff as part of a plan to save £180m over the next three years.

In Wales, directors of social services have said they could not rule out job losses over the next two to three years, while other councils are attempting to renegotiate employment conditions with unions in an attempt to save money. For example, Birmingham Council has opened talks with unions on changes such as a review of car allowances and revised contracts by issuing redundancy notices to 26,000 staff with a view to re-hiring them on new terms and conditions. A council spokesperson insisted no jobs were at risk.

Social care staff also face a squeeze on their pay and pensions. To union anger,the government has announced a two-year pay freeze from 2011 for all public sector staff apart from those earning less than £21,000 a year, who will receive a flat £250 rise in each year. Meanwhile, council staff in England, Wales and Northern Ireland were given a pay freeze this year. Council social care staff also face paying higher pension contributions and losing the right to a final salary pension, under plans outlined by former Labour minister Lord Hutton.

Welfare cuts

Adults” and children’s services will also be hit by cuts to welfare spending, which are expected to increase poverty and homelessness levels.

Plans to reduce welfare spending by £11bn a year by 2014-15 were announced in the Budget in June and the government will go further in tomorrow’s spending review. Measures announced in the Budget included reducing the rate at which benefits rise each year, which will save £6bn a year, cutting housing benefit andreducing the numbers claiming disability living allowance through a new medical assessment.

These have since been supplemented by measures to prevent higher-rate taxpayers from claiming child benefit and to restrict the amount of benefits any household can claim to £26,000, the average income for working households.

The government is also planning to halve the social housing budget, which was described as a “kick in the teeth to millions of people stuck on waiting lists” by the National Housing Federation.