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Finance settlement: new homes bonus diverted to social care

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Communities secretary Sajid Javid has confirmed councils will be able to raise the social care precept by 3% in each of the next two years while £240m is to be diverted from the new homes bonus to fund social care services.

The government is also going to introduce a 0.4% growth target from next year so local authorities will only receive new homes bonus payments on housing built above that baseline. In 2018-19 ministers will consider withholding payments from councils which do not meet planning performance targets, said Mr Javid.

He has also reduced the number of years from which legacy payments are paid from six years to five years in 2017-18 before reducing it further to four years in 2018-19.

Mr Javid said the new homes bonus reforms would “release important funding for adult social care”.

Increasing the social care precept, which had been widely trailed, is expected to generate up to £208m in 2017-18, and £444m in 2018-19, said Mr Javid.

The Department for Communities & Local Government has yet to publish documents accompanying the settlement. However, a spokesman confirmed to LGC that the precept changes meant councils would be able to raise a precept of a maximum of 6% over the course of the parliament with a maximum increase of 3% in any one year. This means councils could still choose to levy 2% a year in each year of the parliament.

Mr Javid claimed the precept changes along with the £240m fund would mean an additional £900m for social care over the next two years. 

Mr Javid highlighted variations in areas’ performance in relation to delayed transfers of care and he said an integration and Better Care Fund policy framework would be published “shortly”.

Meanwhile, pilots for the 100% retention of business rates for London, Greater Manchester, Liverpool City Region, Cornwall, West Midlands, and the West of England starting in 2017-18 were also confirmed by Mr Javid.

He has also decided to defer a proposal to impose council tax referendum limits on parish and town councils but warned ministers would be keeping the issue “under close review”.

More to follow

 

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