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12.01.17

Fattened precept will still ‘do nothing’ to address London social care gap

London Councils has warned against the capital’s local government finance settlement, advising that the ability to raise social care precepts of up to 3% will still “do nothing” to address the region’s £200m annual funding gap by 2019-20.

In an executive committee meeting set for early next week, borough council leaders in the capital are set to discuss the effects on London of the finance settlement, which was set out by communities secretary Sajid Javid in December and included an option for councils to raise their social care precept to 3% for the next two years.

Board meeting papers released ahead of the meeting argued that even if all London boroughs take maximum advantage of the precept, the capital will still have a cumulative funding gap of £700m by 2019-20 – despite its ageing population being set to rise further.

“The flexibility to raise more funding through the social care precept, and frontload it, is some recognition by government of the urgent need to tackle the immediate and significant pressures facing social care,” the report stated.

“However, even if all boroughs levied the full precept, the additional £87m this would raise represents an increase in the money available for adult social care of around 1% over the next three years – at a time when London’s population of older people will rise by more than 6%.”

The settlement spells further frustrations for London’s local authorities as the capital’s settlement funding assessment and core spending power are both set to fall in real terms, with its New Homes Bonus (NHB) due to be reduced by £48m.

The document revealed that leaders are particularly wary about the change to the NHB, which will be reduced from a six to five-year rolling scheme to fund a one-off adult social care support grant this year, worth £241.1m nationally and £37.3m to the capital.

Leaders estimate that London will lose out by almost £11m overall due to the switch in funding, warning that the change will actually contradict government wishes to focus on boosting housing stock.

“While not all of the non-ring-fenced NHB would have been spent on adult social care, the switch to a ring-fenced grant does little to close the funding gap,” the report warned.

“This move will see money designed to incentivise growth and housing supply taken away from councils at a time when the government has made boosting housebuilding a clear priority.”

But the reduction of the NHB will not be bad news to all of London’s councils, with 12 of the 33 boroughs actually set to make slight gains from the plans.

Leaders are set to discuss the report on 17 January, a few days after the consultation on the provisional settlement closes. The response to the consultation will be circulated to the executive in advance of the meeting.

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