The ban on councils borrowing money to pay for services will have to be lifted if Theresa May’s plans for social care go ahead, according to local government finance chiefs.
The Conservatives’ manifesto released last week said people with assets worth more than £100,000 would have to pay for their care if the party was returned to power.
In a controversial U-turn the prime minister later clarified that there would be a limit on the amount that someone could be charged for care – although she did not say where the cap would be set.
But the Chartered Institute for Public Finance says the local government borrowing system would have to be reformed to accommodate the changes.
Currently councils can only borrow for capital spending and it is illegal for councils to borrow to provide services.
CIPFA chief executive Rob Whiteman told Public Service Executive: ‘To implement the new policies, councils will urgently need to know the full details of how the policy will work in practice.
‘Because social care is the single largest controllable cost to upper tier councils deferring much of the income to cover these services will make a material difference to councils’ balance sheets.’
‘Whilst many councils will fund the services now and receive income in future years through using their balances and reserves, the government may need to legislate to allow for councils, at times, to borrow to fund services that will be paid for at a later date.’
For more on Theresa May's social care plans visit The MJ (£).
