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.
“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.”
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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.