Latest Public Sector News

17.01.17

Council CEOs cast doubt on ability of NHB to fund social care

Local authority chief executives have warned that the government’s commitment to deliver greater funding certainty to councils has been “complicated” by the government’s decision to use the New Homes Bonus (NHB) to fund social care.

In its response to the provisional 2017-18 local government finance settlement, Solace criticised the retrospective changes to the NHB, such as the “arbitrary” raising of the baseline for housing growth to 0.4%.

The organisation has urged the DCLG to determine whether or not it is possible to release more funding to support the ailing adult social care sector, as the NHB change and the temporary increase to the social care precept will not raise sufficient funds.

“Whilst increasing the social care precept will give short-term relief to a few local authorities, ultimately, relying on a regressive local taxation system is not a long-term solution to tackling the long-term sustainability challenge our health and social care system faces,” Solace’s response read.

“Likewise, taking money from the NHB may offer similar short-term minimal relief to a few authorities, but simply robbing Peter to pay Paul will not tackle a systemic funding problem.”

The body expressed doubt that the government’s measures will close the social care funding gap and stressed the need for a long-term solution that “does not simply exacerbate existing imbalances”.

Solace’s response echoes other local government responses to the finance settlement, with the County Councils Network (CCN) arguing that the frontloading of the social care precept will only have a “nominal” effect on local government finances.

“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.

Solace’s members called the social care precept “flawed”, citing evidence that councils with the lowest ability to raise income from council tax, perhaps due to economic deprivation, often house people with the greatest need.

“Our local populations are not well served by a system that forces local authorities to squeeze their budgets to support the minority in society who are most vulnerable,” the report read. “Local authorities need to be able to plan ahead to deliver growth that works for everyone.”

Solace stated that it is keen to work with the government to complete a review of the local government funding system, capitalising on the opportunity for change offered by Brexit and upcoming devolution to many areas of the country.

(Image c. CQC)

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