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Social care set to eat up over half of council tax receipts by 2020

Nearly 60p in every £1 likely to be spent on these services, warns Local Government Association

Caroline White

Friday, 10 November 2017

Social care needs for adults and children are set to eat up over half of council tax receipts by 2020, with nearly 60p in every £1 spent on these services, leaving less and less to fund anything else, the Local Government Association (LGA) has warned.

New analysis published ahead of the autumn budget illustrates the strain being placed on council budgets as a result of rising demand for adult social care and children’s services.

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

Inevitably, this means there will be less money available to spend on other vital services, such as road improvements, refuse collection, trading standards, licensing and food safety.

The money local government has for vital day-to-day local services is running out fast, warns the LGA.

By 2020, local government in England will have lost 75p out of every £1 of Revenue Support Grant funding that it received from government to spend in 2015. Almost half of all councils (168) will no longer receive any of this core central government funding by 2019-20.

Government plans to allow councils to retain all of their business rates income by the end of the decade are in doubt after the Local Government Finance Bill, which was passing through parliament before the election, was not reintroduced in the Queen’s Speech.

This is fuelling uncertainty about how local services are going to be funded beyond 2020, says the LGA.

As part of its autumn budget submission, the LGA said local government must be allowed to keep all of the business rates it collects locally each year to plug growing funding gaps. A fairer system of distributing funding between councils is also needed.

However, councils are clear that keeping more business rates income won’t be enough to sustainably fund local services in the long term. The government needs to set out how it intends to further fund councils to meet future inflation and demand for services, such as social care and homelessness, into the next decade and beyond, says the LGA.

Cllr Claire Kober, chair of the LGA’s Resources Board, said: “Demand for services caring for adults and children continues to rise but core funding from central government to councils continues to go down. This means councils have no choice but to squeeze budgets from other services to cope.”

She continued: “Local government in England faces a £5.8 billion funding gap by 2020. Even if councils stopped filling potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes, they still would not have saved enough money to plug this gap in just two years.

“An extra £1.3 billion is also needed right now just to stabilise the perilously fragile care provider market.”

Central government had to recognise that councils simply can’t go on without sufficient and sustainable resources, she insisted.

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