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Spring Budget last hope for social care after ‘hugely disappointing’ council settlement

Local authorities have reacted angrily as communities secretary Sajid Javid confirmed that the local government settlement would see £240m being transferred from the New Homes Bonus put back into adult social care funding – but made no new money available for social care.

In the settlement, Javid said the move of money would be done alongside the ability to raise a 3% social care precept through the council tax, which he argued would raise an additional £900m for social care over the next two years.

The secretary of state also promised to bring forward reform to provide a sustainable market that works for those who need social care, going on to welcome a consensus in Parliament to move towards the integration of health and social services.

But local government leaders were dissatisfied that the final settlement, confirmed last night, had not listened to their earlier concerns that councils would be left scrabbling for unexpected savings during 2017-18, putting them at risk of a financial tipping point.

LGA chairman Lord Porter argued he was “hugely disappointed” at the settlement’s revelation that there would be no new funding for councils coming in the next year.

“Cuts to New Homes Bonus funding will leave two-thirds of councils having to find millions more in savings than expected to plug funding gaps next year,” he reiterated.

“Extra council tax income will not bring in anywhere near enough money to prevent the need for continued cutbacks to local services, including social care.”

Lord Porter also warned that the extra money that would come from councils raising tax rates would be in vain, as it was “swallowed up” by the cost of paying the National Living Wage.

He highlighted the desperate need for councils to receive new money from central government, adding: “Councils, the NHS, charities and care providers remain united around the desperate need for new government funding for social care. By continuing to ignore these warnings, social care remains in crisis and councils and the NHS continue to be pushed to the financial brink.

“If our cherished local services are to survive the next few years and beyond, it is imperative that the government now uses the Spring Budget to take urgent steps to improve the immediate funding outlook for local government and secure its financial sustainability in the long-term.”

Cllr Paul Carter, chairman of the County Council Network, also stressed that the transferral of money from New Homes Bonuses was only a short-term solution and that “genuinely new and innovative funding is essential, but it will not fix the social care crisis”.

“In the short term, changes to New Homes Bonus provide some welcome additional support for county councils through a re-priorisation of funding in two-tier areas,” he said.

“However, this does not benefit all authorities and the precept only adds to the unfair council tax pressures felt by county residents due to the outdated methodology of funding local government.

“Many authorities for now will have no choice but to implement the rise and draw down further reserves. This is not a sustainable approach.”

The District Councils’ Network also responded by agreeing that the funding crisis for social care “is indeed significant”, emphasising that a “durable solution to it needs to be found”.

“However, the changes to New Homes Bonus do not constitute such a solution,” the organisation concluded.

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