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Will council tax increases help to cover the increasing cost of social care?

Posted on 17/12/2016

England’s social care system is under pressure. More and more people need help, but funding cuts and tight budgets mean that many elderly and disabled people are left without care and support services, unless they have the assets to pay for them themselves. Eligibility criteria for local authority funding has been tightened so that it’s only those with high needs that are given financial support.

The Autumn Statement made no reference to funding to adult social care, which received widespread criticism in recent months as the problem continues to escalate. In December, the issue was addressed by the government, with local authorities given the nod to increase council tax at a faster-than-expected rate in order to help the struggling social care sector. Communities Secretary Sajid Javid announced that councils can raise up to an extra 3% from their area in 2017-18 and 3% in 2018-19, a rise on the planned cap of 2% per year, as part of the social care precept. The government claims that this will enable councils to generate £208 million more for adult social care in 2017-18 and £440 million in 2018-19.

The extra money is intended to help support social care services within local communities. Those areas that are particularly struggling with providing care to elderly residents may benefit from a share of a new £240m ‘adult social care support grant’, funded by a housing scheme that is being reformed. However, by using council tax increases as the main way to bring more funding to social care, richer areas are able to generate higher amounts than poorer areas, where council tax bands are lower.

The move by Javid has received lukewarm responses, both from within his own party as well as the opposition. Quoted in The Guardian, Labour MP Clive Efford says: “We’ve got a great big gaping hole and the secretary of state comes here with a sticking plaster.” It has also been noted that council tax doesn’t account for the whole of a local authority’s income, only around half. The rest comes from grants and business rates, both of which are subject to decreases, meaning that it’s so far unclear how much extra money local authorities will benefit from for use in social care.

The announcement means that the sector will see a temporary injection of much-needed cash, but it is not a viable long-term solution to the problem. Martin Green, chief executive of Care England, said in an article on Community Care: “There has to be better accountability of how local authorities spend the precept: at present, few providers of frontline services have seen a meaningful change in the resources they have to provide care. A clear accountability trail is essential to progress. So too is an agreement on fair funding: we welcome the proposal of a Fair Funding Review, but call on government to engage with care providers in shaping its findings. We are also anxious to know the conditions attached the Adult Social Care Support Grant, and are concerned that this is not new money.”

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