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Ministers mull raising council tax limits to fund social care

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Council tax referendum thresholds could be raised to help fund the social care crisis, according to reports.

Prime minister Theresa May and ministers are considering proposals ahead of the local government finance settlement, anticipated to be delivered this week.

BBC Radio 4 reported the government might “claw” any money raised above referendum thresholds back in later years.

Top-tier councils are currently able to add up to an additional 2% on top of regular council tax to help fund social care services.

LGC learned in early November that ministers were considering the measure and there were rumours it would be announced in the autumn statement, but chancellor Philip Hammond made no mention of addressing social care pressures in his speech to parliament, prompting an outcry from the sector.

Izzi Seccombe (Con), chair of the Local Goverment Association’s community wellbeing board, told BBC Radio 4’s Today programme this morning there had been “some dialogue with ministers” about raising council tax above current referendum thresholds.

She said local government needed a “cash injection” of £1.3bn now and added the sector faced a funding shortfall of £2.6bn by 2020.

Former health secretary Stephen Dorrell, who is now the chair of the NHS Confederation, said he was in favour of lifting the council tax referendum thresholds.

He said the “one thing that’s worse” than changing the government’s budget mid-year was “facing a crisis that develops out of control”.

Responding to the reports Richard Humphries, assistant director of policy at The King’s Fund, said addressing the social care crisis would be “a key test of the prime minister’s commitment to a more equal country that works for everyone”.

He said: “Allowing local authorities to raise council tax would provide some welcome extra funding, but our analysis shows this would raise only a relatively small amount of money and would widen existing inequalities as less affluent areas are able to raise less.

“It would be much better to raise funding by bringing forward money from the Better Care Fund. Even if there is more funding for social care in the short term, there would still be an urgent need for a cross-party debate on how we sustainably fund health and social care in the future.”

 

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