William Eichler 26 November 2015

Spending Review: Chancellor's social care plans met with scepticism

The chancellor's announcement yesterday that councils will be able to levy a 2% social care precept on tax to cover social care costs and access an extra £1.5bn to pool budgets has been met with scepticism.

Welcoming the added flexibility the new tax increase gives to councils, the Local Government Association (LGA) warns against relying on council tax receipts to fund already stretched social care services.

Cllr Sharon Taylor, deputy chair of the LGA, said: 'If all councils providing social care increased council tax by an extra 2% each year they would raise £1.7bn by 2020 with the average Band D taxpayer seeing an average rise of £96 in their bill. These council tax raising powers do not represent guaranteed money as not every council will be able to or will want to raise council tax in this way.'

The changes will, the LGA argues, disproportionately hit the more deprived local authorities which may not be able to raise enough through taxation to cover the shortfall in funding caused by government cuts.

The LGA describes the £1.5bn increase in the Better Care Fund as 'good news', but says it should be 'new money' which is directed at adult social care.

Referring to the £1.5bn increase, cllr Taylor said: 'We are concerned that councils will not see the benefit until towards the end of decade when services supporting our elderly and vulnerable are at breaking point now.'

Care England, the largest representative body for care providers, shared the LGA's concerns over the promise of an extra £1.5bn from the Government.

Its chief executive Prof Martin Green said: 'The extra money that was announced today in the chancellor’s Comprehensive Spending Review will not deliver enough money, and it will certainly not be in time to avert a crisis in some care services.'

He also called for a review of the Better Care Fund 'to ensure that in future the £1.5bn that the chancellor has announced goes directly into front-line care.'

GMB, the union of care workers, criticised George Osborne in more strident tones, accusing him of 'passing the buck.'

They argue that the chancellor's figures don't necessarily add up.

In the CSR, George Osborne claimed that the extra 2% added onto council tax will bring over £2bn more into the care system.

But, claims Paul Kenny, GMB general secretary, 'George Osborne’s numbers only add up provided the growth forecasts from the Office for Budget Responsibility for GDP growth of 2.4% in 2015, then 2.4% in 2016, 2.5% in 2017, 2.4% in 2018 and 2.3% in 2019 and 2020 actually happen. This is far from certain.'

'Everybody knows that the adult care sector is facing a huge funding crisis', he continued. 'Mr Osborne has passed the buck to the whim of local authorities rather than face up the fact that the Government itself has the responsibility to fund the care of the elderly and other vulnerable adults.'

Heléna Herklots, the chief executive of Carers UK, welcomed the government's recognition in the CSR that the care sector is in 'deep crisis', but expressed disappointment at what she feels is inadequate funding to tackle the problem. This lack of sufficient funding will, she argues, put extra pressure on families.

'Without access to social care, families have to step in, meaning they are providing more and more care at greater cost to their own health, wellbeing and financial security. Carers are already saving the UK economy £132bn every year with the unpaid care they provide.'

During the CSR, George Osborne vowed to ‘deliver a modern, integrated health and social care system that supports people with every stage of their lives’.

'But', Ms. Herklots said, 'by missing its opportunity to invest in care, the Government is sabotaging its own plans for a more efficient and productive NHS.'

Alan Mo of Kable is also concerned the chancellor's ambition for a more integrated health and social care system will be undermined by a lack of funding.

'Local authorities', he warned, 'will not be able to rely on the 2%, and local areas will need to double up efforts towards health and care integration'.

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