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Senior figures question social care 'new money' claim

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Senior local government figures have rejected claims funding for adult social care announced in today’s local government finance settlement is truly “new money” that will address the growing funding shortfall, as communities secretary Sajid Javid claimed.

Mr Javid confirmed today that councils would be able to raise the social care precept by 3% in each of the next two years – a move he said would generate up to £208m in 2017-18, and £444m in 2018-19.

A further £240m will be diverted from the new homes bonus to fund a social care grant.

Sean Nolan

Sean Nolan

Sean Nolan

Throughout the settlement statement Javid repeatedly described the total £900 million this is expected to generate over the next two years as “additional” and “new” funding. “This is a real, significant increase” he said.

Local Government Association chair Lord Porter said the £2.2bn cuts to revenue support grant in 2017-18 would “far exceed the benefit of any extra council tax income”.

He said it was “wrong” to present the funding of social care from new homes bonus as a “solution” to the social care funding crisis, and pointed out that money for the new homes bonus was already top-sliced from central government funding for councils.

“This is money which was taken from councils in the first place and this move will see money taken away from councils which is designed to incentivise new homes at a time when the government has made boosting housebuilding a clear priority.”

Local Government Information Unit chief executive Jonathan Carr-West said there was an “emerging consensus that this is not new money”. He pointed out that moving £240m from the new homes bonus to adult social care meant overall government finances would remain the same.

“Council tax rises cannot be the answer to the crisis in adult social care funding as many of the councils with the most pressing care needs have the lowest council tax base,” he added.

Society of Local Authority Chief Executives and Senior Managers president and chief executive of Doncaster Metropolitan Borough Council Jo Miller said the government was “robbing Peter to pay Paul”, and the measures announced would only give “short term relief”.

Joe miller

Joe miller

Source: IFG

Joe Miller

Today’s announcement that councils will be able to apply a precept of 3% a year over two years, rather than 2% of year over three years, makes more money available next year but little difference in the additional funds available over the course of the parliament.

The Chartered Institute of Public Finance and Accountancy’s head of local government Sean Nolan said in effect the real-term boost for 2017-18 was only 1%.

“Because most councils were already planning to use the existing freedom to increase the social care precept by 2% in the next financial year, to bring it up to 3% is effectively only a real-term boost of 1% for 2017-18,” he said.

“It scarcely addresses the chronic under-funding now, never mind in the medium to long term.”

The Local Government Association estimates that social care faces a funding gap of £2.6 billion by 2020.

Assistant director for policy for The King’s Fund Richard Humphries agreed. “It is nowhere near enough to address next year’s funding gap,” he said.

“The emphasis on the precept risks increasing the inequalities that mean the wealthiest parts of the country can raise up to three times as much as poorer areas. Simply passing the problem to councils to solve is inadequate.”

*This story was update at 2.55pm to include a comment from Lord Porter


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