Urban councils stand to lose millions of pounds against what they expected to receive for implementation of the Care Act.
Councils were given ‘illustrative’ allocations last December. But a consultation on funding formulae from the Department of Health shows that many can expect sharply different sums.
London Councils’ director of finance and fair funding Hugh Grover told LGC that while the capital expected care and support costs to increase by 27% once the act took effect, the new distribution method for the £284m available meant London would receive £13m less than expected.
Mr Grover said the consultation took no account of social care clients aged under 65, or of owner occupiers who were not outright owners, but awarded substantial increases to shire counties and unitaries, which “some might see as rather odd”.
“To fundamentally alter the funding landscape at this stage undermines local authority attempts to plan sustainable services,” he added.
Carol Culley, assistant chief executive (finance and performance) at Manchester City Council, told LGC: “We will be expressing concerns”.
She said that in Greater Manchester while Bury, Stockport and Trafford MBCs all gained slightly, Manchester City Council would see a 53% reduction and the other six councils would be hit by 10-25% losses.
Finance directors believe that the money is flowing from urban to more rural areas as it follows self-funders rather than the costs councils face.
Paul Carter (Con), who leads on care for the County Councils Network, said counties had “considerably higher proportions of self-funders” who were the main drivers of demand under the act. The new distribution was “fairer”, he said.
A DH spokeswoman said: “These figures only reflect allocations for particular parts of our reforms, so are not an accurate reflection of the overall allocations that local authorities will receive.” The department will consult separately on funding formulae for 2016-17.
An LGA analysis that compared the two distribution figures showed the three highest gainers would be Wokingham BC (68%), Dorset CC (46%) and Windsor & Maidenhead RBC (41%).
The three steepest reductions were Tower Hamlets LBC (75%), Hackney LBC (70%) and Islington LBC (65%).
Overall, London boroughs would lose £12.8m (29%) and metropolitan councils £13m (19%) while counties would gain £24.3m (23%); unitaries would be unchanged overall.