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16.01.17

CCN: Funding mismatch has put council services at ‘significant crossroads’

England’s county leaders have warned that the “fundamental mismatch” between funding and demand for social care has put councils at a “significant crossroads” when it comes to guaranteeing the sustainability of statutory services.

In its local government finance settlement submission, the County Councils Network (CCN) has called for a long-term solution including “genuinely new funding” in March’s Budget rather than short-term measures such as the frontloading of the social care precept and the redirection of New Homes Bonus (NHB).

The CCN highlighted that increasing the precept to 3% for two years will only have a ‘nominal effect’ and would actually make county councils worse off by 2020 if they amend their original plans to raise council tax by 2%.

“Unless we have genuinely new funding, services the sick, elderly, and vulnerable depend on will continue to have a question mark hanging over them,” said Cllr Paul Carter, chairman of the CCN.

“Fresh resource will provide a platform to integrate services, stabilise care markets, and to revisit the cap on care.”

Local government has been hit hard by the government’s austerity measures, having been subject to an estimated real-terms funding reduction of 37% since 2010.

The CCN argued that the increase in the precept will still leave county councils reducing their reserves and services next year due to their “disproportionate” council tax burden and the 93% drop in core grants they will receive by 2020.

The CCN’s submission welcomed the re-routing of the NHB as a “logical step” in tackling the social care crisis, with the government making changes such as the introduction of a 0.4% baseline for housing growth, but this reform to the NHB has not been universally received with the District Councils’ Network (DCN) saying last week that it would disproportionately damage district councils.

This controversy has led to the CCN proposing targeted transitional measures for upper-tier councils facing a further reduction in funding as a result of the changes.

According to the CCN, over half of the country’s population over 65 live in counties, with the figure set to grow faster than other areas by an average of 2% every year up to 2020. However, counties receive the lowest per head funding for elderly people.

The CCN has called for the government to speed up its needs-based review of how local authorities are funded, saying bringing the timetable forward would “go a long way to ensuring that social care is sustainable” and help county councils address the problems around them.

“Empowered county authorities must play a key part in fixing the social care funding crisis,” Cllr Carter said. “They must be trusted to lead the integration drive, and government must build upon counties’ expertise, financial prudence, and size to deliver fundamental reform as part of a long-term solution.”

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