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15.12.16

Leaders revolt as £900m social care boost ‘a regressive, short-term sticking plaster’

As previously indicated by PSE, communities secretary Sajid Javid has decided to allow councils to bring forward a planned increase in the social care precept, meaning local authorities will be able to raise a 3% care levy in the next two years rather than the expected 2%.

Speaking about the local government finance settlement at the Commons this morning – for which a whopping 97% of councils signed up, as had been expected – Javid agreed with many organisations that social care is the biggest cost pressure on local government at present.

As well as bringing forward the social care precept, which will result in a 6% rise in council tax this Parliament but only add a pound to individual tax bills, the secretary of state also promised to inject savings from major reforms to the New Homes Bonus (NHB) into the care sector for extra padding in 2017-18.

Implementing the 3% precept would allow councils to raise up to £208m in 2017-18 and £444m in 2018-19. Altogether, the alleged boost to the sector would amount to almost £900m.

However, it is expected that many, if not all, organisations will argue this extra money is insufficient to plug the major cash hole in the sector – with even health devo giant Greater Manchester worried that massive care costs will undermine the region’s overall transformation plan.

Joe Anderson, mayor of Liverpool City Region, which recently admitted to a financial dead end, took to Twitter to complain that the government’s response to the social care crisis is “like putting plaster on a patient that needs a triple bypass” – and that letting councils raise tax by 3% rather than the expected 2% is “not the bold radical change” the sector needs.

“Government will say today [that] they are giving more money for social care,” he wrote. “We have £90m cuts, but they will let us raise an extra £1.5m. Not enough!”

Robbing Peter to pay Paul

Similarly, Jo Miller, the new president of Solace and the chief executive of Doncaster council, said that while the fattened precept will provide a short-term relief, “ultimately relying on a regressive taxation system is not a long-term solution to tackling the long-term sustainability challenge our health and social care system faces”.

“Likewise, taking money from the NHB may alleviate short term pressures, but simply robbing Peter to pay Paul will not tackle a systemic funding problem. This needs a long term national solution that does not simply exacerbate existing imbalances,” she continued.

“Our local populations are not well served by a system that forces local authorities to squeeze their budgets to support the 20% in society who are most vulnerable. Local authorities need to be able to plan ahead to deliver growth that works for everyone.”

The LGiU agreed with Miller, noting that the finance settlement highlighted “exactly what is wrong with our over-centralised political system”.

The organisation’s CEO, Jonathan Carr-West, said: “Council tax rises cannot be the answer to the crisis in adult social care funding as many of the councils with the most pressing care needs have the lowest council tax base.

“In the end, this problem cannot be addressed while we continue to treat health and social care as separate systems and to protect the NHS at the expense of social care. After a decade of public debate all we have is a sticking plaster of increased council tax and no long term solution for the greatest public policy question of our age.

“Using local authorities as the whipping boy of the Treasury will only go so far. Radical reform is long overdue and the Treasury should have the NHS in its sights in order to answer this crucial question.”

Cross-party talks needed – including with the PM

Sarah Wollaston, the Conservative chair of the Health Select Committee, agreed that the announcement does not go far enough, instead urging Javid to engage in cross-party talks in order to find a better long-term settlement to the country’s care crisis.

And the GMB, who claimed the current social care funding gap could be as large as £2.6bn, reiterated the prevailing argument that because tax income varies from place to place, Javid’s scheme will lead to a “shocking disparity between rich and poor areas – effectively a social care postcode lottery”.

Its national secretary, Rehana Azam, called on Theresa May to step up to the problem, adding: “GMB has been warning the government for years that council tax is no way to plug the vast social care funding black hole – but they wouldn’t listen.

“Morale is at an all-time low and this half-baked response from government will apply more crushing pressure to their already difficult roles in caring for the elderly and the most vulnerable in society. Now we will all pay the price for this social care post code lottery – today's announcement is a disaster and the PM needs to step up and address this.”

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