|Despite the ‘cheers’, there are real fears
The introduction of the National Living Wage (NLW) last week will push services caring for our elderly & disabled towards breaking point and a care provider crisis closer to reality without new social care funding being provided, council leaders say. The LGA said councils support the new NLW – which came into force on 1 April 2016 – but warns it risks destabilising the care provider market by adding a significant cost to the social care system. Councils have already had to close a £5bn funding gap in social care since 2010 and are continuing to struggle with major ongoing pressures.
The LGA has previously estimated it could cost councils an absolute minimum of £330m in 2016/17 to cover increased contract costs to home care & residential care providers, but warn the true cost is likely to be much higher.
Previous LGA analysis indicated council tax rises to increase funding specifically for social care will bring in around £372m in 2016/17. The LGA is warning that, for some councils, all of this extra money will be swallowed up by covering the cost of the NLW. For others, it will not be enough to cover increased care provider costs let alone cover the cost of other pressures within the system and protect social care services from any further cutbacks.