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Almost 60% of Council Tax to be spent on social care

The majority of Council Tax will be spent on social care by 2020, with little left over to pay for repairing potholes, cleaning the streets and running libraries.

We are heading for a funding crisis at local councils with not enough Council Tax revenue to cover the spiralling cost of social care, it has been claimed.

Almost 60p in every £1 that people pay in Council Tax may have to be spent on caring for children and adults by 2020, warns the Local Government Association (LGA).

The new figures show the strain council budgets are under as they try to cover the cost of increasing demand for adult social care and children’s services.

For every £1 collected via Council Tax in 2019/20 the LGA forecasts that 56p will be spent on caring for the elderly, vulnerable and children. That is up from 41p in 2010/11.

The increasing need for social care means local councils are having to divert money from other areas to pay for it. As a result, less money is available for other vital services such as bin collections, repairing potholes and paying for food safety inspectors.

No money to repair potholes (Image:Shutterstock)

“Demand for services caring for adults and children continues to rise but core funding from central government to councils continues to go down,” says Councillor Claire Kober, chair of the LGA’s Resources Board.

“This means councils have no choice but to squeeze budgets from other services, such as roads, street lighting and bus services to cope.”

Opinion: It's time to overhaul Council Tax

To add to the problem, local councils will receive far less money from central Government to help with costs.

By 2020 local Governments in England will have lost 75% of the Revenue Support Grant they started receiving in 2015, while almost half of all councils will have stopped receiving this grant completely.

There are also fears that the Government’s plan to replace this lost revenue by allowing local Governments to keep all of their business rate income may be scrapped after the Local Government Finance Bill, which was passing through parliament before the election, was not reintroduced in the Queen’s Speech.

“Local government in England faces a £5.8bn funding gap by 2020,” says Kober.

“Even if councils stopped filling potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they still would not have saved enough money to plug this gap in just two years.”

The LGA has released this information to highlight the funding problems facing local councils ahead of the Chancellor’s Autumn Statement in the hope it will push the Government to re-introduce the Local Government Finance Bill.

“Within two years, more than half of the Council Tax everyone pays may have to be spent on adult social care and children’s services. Councils will be asking people to pay similar levels of council tax while at the same time, warning communities that the quality and quantity of services they enjoy could drop,” warns Kober.

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  • 12 November 2017

    Whichever way you cut it, I have a real problem the word "profit" and the term "The Care Industry". We are talking about people, not manufacturing. It sticks in my throat that council CEOs (why do we even need them?) complain about funding shortfalls whilst taking home close to £250k a year, an expense account and a new taxpayer funded car in the council carpark. Councils are stuffed with "managers" who look after their own interests - the cost of which results in insufficient funds remaining to actually provide services that we thought we were paying for. There are a number of "not for profit" care homes around the country - they seem to be a small step in the right direction.

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  • 10 November 2017

    I must disagree with Julieannart in almost every respect. Governments both local and central are not businesses and its not their job to run “revenue earning projects” – in any event governments have shown themselves to be incapable of running businesses in the past. The utilities like gas electric and telecoms, railways are today very much superior to their state owned predecessors mainly because they’re not run by civil servants and don’t have elected politicians tying them in knots for political advantage. And where would the government get the money to invest in these projects – we’re running a deficit somewhere between £40-50bn this year? Social housing isn’t easy on the taxpayer, provate landlords make thin margins on rents 2-3 times those charged in the social sector – basically its uneconomic. However, the cost of housing benefit is absolutely atrocious, and to reduce that cost it is worthwhile investing in social housing, but I would add the caveat that this be done via housing associations with a remit to charge economic rents rather than politicians setting absurdly low rents to gain electoral benefit. It’s the housing shortage that is leading to high house prices and indirectly high private sector rents. We should encourage house/home provision so that 250,000 -300,000 homes are built each year, mainly in areas where prices are the highest. I don’t agree that council owned and run care homes are cheaper than private care homes. If it were, Councils would run their own facilities – but the trend for many years has been in the other direction with Councils getting out of this type of provision. The reason is quite simple public sector staff get very good pensions costing the equivalent of 25% of salary. Those in the private sector tend not to get good pensions – typically 8% would represent the upper limit for a private sector pension cost to the employer. Once you factor in that public sector jobs (which are highly unionised) probably are better paid than the equivalent in the private sector and you have an impossible gulf to bridge – even after paying a profit to the private company. Thatcher’s aim was to encourage people to provide for their own future costs and not to rely on the public purse so much. She could see how the demographics were moving and that the cost to the public purse of a growing elderly population was likely to be unaffordable. Thatcher hasn’t been in power now for almost 30 years so it’s a bit rich to lay blame on her for the countries ills rather than those who came after. Thatcher wanted us all to make our own provision for old age – those who came after took a different line. That’s why everybody looks to the state to fund social care rather than their own pocket. PS in my area 70% of the councils funding comes from central government. Only 30% comes from the council tax. So to say 60% of council tax is spent on social care means 18% of all my local councils spending is on social care – doesn’t sound so bad now does it. Lies, damned lies and statistics!!

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  • 10 November 2017

    one wonders how many fat cats make nice living out of the private care home system too.

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