The majority of councils are considering making use of the new 3% social care precept, despite a widely held view it will do little to alleviate severe funding pressures, LGC research suggests.
More from: LGC Council Tax Tracker 2017
LGC contacted the 54 councils whose 2017-18 council tax proposals had alread featured in our 2017 Council Tax Tracker to find out if their plans had changed in light of the precept changes announced at last month’s provisional local government settlement.
Of the 30 that responded, 24 confirmed they were considering the option to increase the precept to 3% in 2017-18.
Most said they were looking at raising overall council tax bills by 4.99% – the maximum permitted without a referendum.
Announcing the settlement, communities secretary Sajid Javid announced said councils would be allowed to raise the social care precept by 6% over the next two years, rather than over three years as announced at last year’s settlement.
Mr Javid said doing so would generate up to £652m extra to spend on social care over the next two years if every council took up the offer.
Blackpool BC leader Simon Blackburn (Lab), who expects his council to increase the social care precept to 3%, warned: “Theresa May had some fairly harsh words in the Commons for Labour councils who did not use the social care precept last year.
“Whatever the rise, we don’t want to end up in discussions with government over social care without having utilised our council tax raising powers.”
The Local Government Association has predicted a social care funding gap of 2.6bn by 2020.
Many councils that confirmed they were discussing whether to take up the 3% option insisted the money raised would do little to alleviate funding pressures.
Manchester City Council, which spends about £157m a year on social care services, said raising the care precept by the maximum amount allowed would raise £8.8m next year but added it “would only address a small proportion of the pressures”.
“If we did not proceed with council tax rises, we would have to find £17.3m more savings,” the council said in a statement.
Bradford MBC leader Susan Hinchliffe (Lab) said an extra 1% on the care precept only raised £1.6m in her area but added the council was left with “little choice” but to propose a 3% precept rise due to pressure on services.
Bill Dixon (Lab), leader of Darlington MBC, which is proposing to raise the precept by the maximum amount allowed, said the system “represents a case of robbing the poor to feed the even poorer”.
Confirming Trafford MBC would raise the precept to 3% this year, leader Sean Anstee (Con) said the measure would help alleviate some social care pressures, but would “not bridge the significant gap in social care funding”.
Local Government Association chair Lord Porter (Con) said an additional 1% on the social care precept was “not going to be the solution” to the funding crisis.
Six councils – Kent, Leicestershire, and West Sussex CCs, Brent and Hounslow LBCs, and Doncaster MBC – have already ruled out increasing the care precept above the previous 2% threshold. The three counties and Doncaster have elections in May, while London boroughs hold polls next year.
Leicestershire CC’s leader Nick Rushton (Con) said it would be “pretty hard to justify” a precept increase beyond 2% this year.
“It is a hard sell electorally when people are strapped for cash,” he told LGC.
Kent CC’s leader Paul Carter (Con) said any funding pressures could be absorbed through reserves and added county council elections were “very much at the back of our minds”.
Funding social care was government’s responsibility, said Hounslow LBC’s leader Steve Curran (Lab) who added: “If we put [council tax] up by 25%, it still wouldn’t even touch the sides.”
Mr Javid also announced last month that new homes bonus payments would be reduced from six years to five years in 2017-18, releasing £241m for social care. He also said a growth target of 0.4% would be introduced in 2017-18 so local authorities would only receive payments on new homes above that baseline.
LGC analysis shows Swindon BC is set to lose £1m as a result of those alterations. Leader David Renard (Con) said councillors were left with “little choice” but to raise the precept.
Additional reporting by Mark Smulian and Freddie Stewart
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