Local government officials have welcomed the pre-Christmas confirmation of a spending boost for councils in England – but warned the current way of funding social care was “not sustainable”.
Robert Jenrick, the Local Government Secretary, has announced an increase of almost £3 billion for councils across England in a financial settlement package worth £49 billion overall in 2020/21.
The total includes an additional £1 billion for social care but the Local Government Association (LGA) has warned the Government that a proper solution to pay for elderly people’s care must be found.
Currently, local authorities can slap on a 2% levy to council tax bills to help provide an extra £500 million to social care budgets.
In the Queen’s Speech on Thursday, the Government said only that it would look to find cross-party consensus on a solution.
Prime Minister Boris Johnson, in the Conservative Party manifesto, said he would not accept any recommendation that would mean people had to sell their home to pay for care in their old age.
Councillor James Jamieson, chairman of the LGA, said: “The ability of councils to increase council tax and levy an adult social care precept next year gives them the potential to raise £1.6 billion, but this is not a sustainable solution.
“Increasing council tax raises different amounts of money in different parts of the country, unrelated to need, and adds an extra financial burden on households.
“The Government needs to follow through on its pledge to bring forward proposals for long-term reform of adult social care and how it is funded.”
In 2017, Surrey County Council – in protest at the lack of action on social care – voted to increase the levy by 15% before later backing down. The rise would have sparked a local referendum.
Local authorities have been hit hard by cutbacks overall since the Tories came to power in 2010, with a third of Liverpool City Council’s funding stripped out in that time.
Barnsley Council has had to axe four in 10 jobs due to a 40% reduction in its day-to-day budgets in the eight-year period up to 2018.
But Mr Jenrick said his annual settlement was the biggest year-on-year real terms increase in council spending power in a decade – a 4.4% increase on 2018/19.
The Cabinet minister said: “This Government is committed to unleashing the huge potential of this country and we are giving communities the funding that they need to thrive, support the most vulnerable in our society and also protect the vital services that we all rely on.”
As part of the package, the Government has committed to continue the new homes bonus scheme into 2020/21.
The scheme financially rewards local authorities for the number of new homes they build.
However, ministers have yet to release the restraints banning council leaders from borrowing to build council houses.
In the terms of the new financial settlement, which will be finalised next year, any attempts to increase council tax by 2% or more will continue to be subject to a local referendum of residents, although mayoral combined authorities, such as those in Manchester, Liverpool and Teesside, will be exempt from the rule.
To support rural areas, the Government pledged to maintain last year’s rural services delivery grant at £81 million, matching the highest rural grant paid to date, according to the Department for Housing, Communities and Local Government.