Councils will need billions of pounds in extra funding to meet rising costs of adult social care, warns IFS

Councils will need billions of pounds in extra funding to meet the rising costs of adult social care, even if council tax increases at double the rate of inflation, a new report from the Institute for Fiscal Studies (IFS) warns.

A growing elderly population and a rise in the number of disabled adults mean English councils will need an additional £4bn a year from the government by the end of the parliament just to maintain social care services at current levels and stop further cut backs on other services such as children’s social care and housing, the report predicts.

It finds that government measures intended to alleviate the problem – including an additional £1.3bn in funding for councils next year and allowing councils with social care responsibilities to increase council tax by up to 4 per cent – could be just a “lull in the storm”.

Even if spent in full, this extra cash from the government and council tax would only be enough to undo around a fifth of the peak-to-trough fall in councils’ spending on services, according to IFS researchers.

And even with council tax going up by 4 per cent a year every year – double the rate of inflation – councils may need an additional £1.6bn a year in real-terms funding by 2024–25 – which would grow to £4.7bn by 2029–30 and £8.7bn by 2034–35.

The IFS said this would be required just to maintain services at current levels, and that councils’ spending on local public services per resident would, next year, still be at least 20 per cent below 2009–10 levels, on average.

David Phillips, author of the work and an Associate Director at the IFS, said: “Detailed public spending plans for 2021–22 and beyond have not yet been published. But we do know that councils will rely on council tax and business rates for more of their funding going forwards.

“And those revenues just don’t look like they will keep pace with the rising costs of services like adult social care – even with council tax bills going up at 4 per cent a year, which is double the rate of inflation.

“That means finding billions more in funding to top up existing local tax revenues, even before thinking about new initiatives like free personal care.”

It comes after The Independent revealed a warning from health chiefs that the UK faces a crisis in social care under Boris Johnson’s plans to introduce fast-track “NHS visas”.

A document written by NHS Employers warns that the proposals, intended to prevent an impending post-Brexit staffing crisis, makes no provision for people working in social care and could therefore have devastating consequences for vulnerable people.

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