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Council tax increases to be 'wiped out' by wages and carers costs

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Over half a billion pounds will be raised through the adult social care precept in 2018-19, the Local Government Association has revealed. However, the LGA has warned it is insufficient and that “funding gaps must be properly addressed”.

Funds raised will be “wiped out by the cost” associated with paying the national living wage, while councils are also facing a bill of at least £400m in back-payments for sleep-in carers, the LGA said.

Of the top-tier councils, 108 (or 71%) are increasing general council tax by 2.95% or more next year. In total, general council tax increases will raise a further £584m for local services, but core central government funding to councils has been cut by £1.4bn (or 28%) this year alone.

Sixty-four councils (42%) are considering or have approved increasing council tax by the maximum 5.99% allowed without a referendum. This includes a 2.99% general council tax increase plus a 3% rise for the social care precept. In total, the precept is set to raise £548m.

Just five top-tier councils have approved or intend to freeze council tax completely this coming year.

The LGA said 75 top-tier councils (49%) will not be able to levy any social care precept in 2019-20 because they will have already raised it by the maximum 6% allowed over three years. By 2019-20 council services for the elderly and disabled will face an annual funding gap of £2.3bn, the LGA added.

If all district councils raise the maximum amount of council tax available to them in 2018-19, that will raise an additional £66m.

With local government facing an overall funding gap that will exceed £5bn by 2020, the LGA is warning these council tax rises will not prevent cuts to services.

LGA chairman Lord Porter (Con) said “severe funding pressures” mean “many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services”.

He added: “We have repeatedly warned of the serious consequences of funding pressures facing services caring for the elderly and disabled, protecting children and tackling homelessness for the people that rely on them and the financial sustainability of other services councils provide. It is unfair to shift the burden of tackling a national crisis onto councils and their residents.

“The need for adequate funding for local government is urgent. To maximise the potential of local government and protect local services from further cuts, funding gaps must be properly addressed and local government as a whole must be allowed to keep all of the business rates it collects locally each year to put it on a sustainable footing.”

Previous LGA analysis has warned that for every £1 of council tax collected by councils in 2019-20, 56p will be spent on caring for the elderly, vulnerable adults and children. This is up from 41p in 2010-11.

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Readers' comments (1)

  • Is it possible to say which are the 5 authorities that have approved or are planning to approve a freeze?

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