LGC’s commentary on the local government finance settlement
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The government has found an extra £150m for social care but we will not know until tomorrow if this is sufficient to win over Conservative backbenchers, concerned about their respective councils’ social care financial black holes.
This sum, set to be doled out as a result of today’s final local government finance settlement, conveniently works out at almost exactly at an average of £1m per top-tier council. There has also been an increase of £16m in the rural services grant on the provisional settlement figure.
However, the government’s past form, when it introduced the transition grant in 2016 to help councils struggling with the decline of revenue support grant, was to somehow devise a funding formula that ensured the overwhelming majority of funds went to Conservative councils. Ministers have always refused to reveal their rationale for this distribution, leading to allegations of manipulation.
This episode was very much in the mind of Nottingham City Council deputy leader Graham Chapman (Lab) whose column on the issue was published by LGC this morning, urging the government not to “bail out” counties.
Cllr Chapman claimed counties in financial distress like Northamptonshire CC had “mismanaged their finances” by failing to increase council tax. He asserted the transitional fund was “a mechanism to channel funding to selected councils on the basis of their political colour”.
However, in his parliamentary statement, communities secretary Sajid Javid appeared to indicate the new resources will be “allocated according to relative needs”.
Analysis by Pixel of the final Ministry of Housing, Communities & Local Government allocations suggests county councils will receive £56m of the additional social care funding, London boroughs £23m, metropolitan councils £37m and unitary councils £34m.
Thus the distribution appears to be somewhat fairer this time around. We will find out tomorrow in the parliamentary vote on the settlement if this fairness was a mistake. Remember, a group of up to 15 Tory MPs – large enough to frighten the government given its wafer-thin working majority with the DUP – threatened to revolt if more money was not found for their local councils to pay for social care. However, even if the government wins, no one is suggesting that this is the solution to social care funding.
Today’s announcement of the extra £150m for social care funding for 2018-19 was met with little enthusiasm. The Local Government Association urged the government to present longer-term solutions than this. LGA chair Lord Porter (Con) said: “The additional one-off social care funding announced today is a temporary measure and needs to be compared against an annual social care funding gap of £2.3bn by 2020.”
Paul Carter (Con), chair of the County Councils Network, claimed ministers understood “the enormity of the financial challenges facing counties” but urged the government to “adopt an evidence-based funding methodology that truly recognises growing demographic pressures in counties”.
District Councils’ Network chair John Fuller (Con), said: “We remain disappointed that our clear role in reducing demand for the most expensive social care elements has not been recognised.”
In short, the general view is that this adult care support grant is a £150m sticking plaster. As former Worcestershire CC director of adult services Eddie Clarke tweeted, this offering presents councils with “no cake, just crumbs from the floor”.
Shadow communities secretary Andrew Gwynne described the £150m as a “bung” to “stop a rebellion on the backbenches”.
The scale of the social care challenge is huge. In its long-promised social care green paper, due this summer, the beleaguered government must somehow be radical enough to make a meaningful difference whilst proposing palatable enough reforms to secure cross-party support from a Labour party employing an emotive, moralistic campaign.
Should the green paper fail to deliver – or even materialise then at all – backbenchers and county leaders will grow ever-louder in their opposition.
By Rachel Dalton, features editor