Latest Public Sector News

01.04.16

Most councils to use care precept as tax bills see highest rise in 8 years

Around 95% of councils in England will be taking advantage of the government’s new social care precept from 2016-17, DCLG figures have shown, as cities ready themselves for the largest increase in council tax in eight years.

The figures, released yesterday, showed that 144 of 152 social care authorities will use all or some of the 2% precept when setting their council tax this financial year, which kicks off today (1 April).

The increase in tax brought on by the precept largely accounts for the 3.1% hike in council tax this year. Compared to last year, the increase would have been just 1.6%, with the care precept now adding 1.5% to that measure.

The last time tax increased by more than 3% was in 2008-09, when the average Band D council tax rose to £1,373, a change of 3.9% from the previous year. This year, average tax has escalated to £1,530.

Overall, the adult social care precept in 2016-17 will total £382m. The overall council tax requirement, including the care and parish precepts, is £26.1bn.

But Richard Humphries, assistant director of policy at the King’s Fund, was quoted as saying that even if the precept does raise £382m, it still “falls way short of the funding gap in adult social care, which is about £1.2bn”.

“So this is a hopelessly inadequate response to the growing pressures on social care,” he added. “Local authorities have to wait until 2018 before any significant new money arrives through the new Better Care Fund. What happens between now and then is anyone’s guess.”

In February, when the LGA argued that council tax precept rises will not be enough to fix the “social care funding crisis”, its vice chair, Cllr Nick Forbes, said: “After years of striving to keep council tax as low as possible or frozen, town halls find themselves having no choice but to ask residents to pay more council tax over the next few years to offset some of the spiralling costs of social care in 2016-17.

“At the same time, they are warning communities that despite council tax rising, the quality and quantity of services on offer could drop, as the income will not be enough to offset the full impact of further funding reductions next year and with the National Living Wage bringing a significant further cost pressure from April.”

But communities secretary Greg Clark argued differently, saying yesterday that England’s “historic four-year funding deal” for councils gives them “certainty to plan ahead” and meets their request to prioritise social care.

“Today's figures show how councils are keeping council tax low, and using the freedom they asked for to set a social care precept as part of local bills,” he added.

“Even with this, council tax will still be lower in real terms in 2019-20 than in 2009-10 – and this year's increase is still lower than the average 6.2% annual increase between 1997 and 2010.”

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