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LGA - Almost 60p in every £1 of council tax could be spent on social care by 2020

New analysis by the Local Government Association, published ahead of the Autumn Budget, illustrates the strain being placed on council budgets as a result of the rising demand for adult social care and children’s services.

For every £1 of council tax collected by councils in 2019/20, the LGA forecasts 56p could be spent on caring for the elderly, vulnerable adults and children. This is up from 41p in 2010/11.

As a result of the pressures on adult social care and children's services, less funding will be available to be spent on other vital services. For example, 6p in every £1 of council tax by 2020 could be spent on collecting bins and recycling, 5p in every £1 on improving roads and street-lighting, 2p in every £1 on bus services and just over 1p in every £1 on trading standards, licensing and food safety.

The LGA is warning that the money local government has to provide vital day-to-day local services is running out fast.

By 2020, local government in England will have lost 75 pence out of every £1 of Revenue Support Grant funding that it received from government to spend in 2015. Almost half of all councils - 168 councils - will no longer receive any of this core central government funding by 2019/20.

Government plans to allow local government as a whole to keep all of its business rates income by the end of the decade are in doubt after the Local Government Finance Bill, which was passing through parliament before the election, was not reintroduced in the Queen’s Speech.

The LGA says this has led to real and growing uncertainty about how local services are going to be funded beyond 2020.

As part of its Autumn Budget submission, the LGA said local government must first and foremost be allowed to keep all of the business rates it collects locally each year to plug growing funding gaps.  A fairer system of distributing funding between councils is also needed.

However, councils are clear that keeping more business rates income on its own will not be enough to sustainably fund local services in the long-term. The LGA said the Government needs to set out how it intends to further fund councils to meet future inflation and demand for services, such as social care and homelessness, into the next decade and beyond.

Cllr Claire Kober, Chair of the LGA’s Resources Board, said:

“Demand for services caring for adults and children continues to rise but core funding from central government to councils continues to go down. This means councils have no choice but to squeeze budgets from other services, such as roads, street lighting and bus services to cope.

“Within two years, more than half of the council tax everyone pays could 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.

“Local government in England faces a £5.8 billion funding gap by 2020. 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.

“An extra £1.3 billion is also needed right now just to stabilise the perilously fragile care provider market.

“The Government must recognise that councils cannot continue without sufficient and sustainable resources. Local government must be able to keep every penny of taxation raised locally to plug funding gaps and pay for the vital local services our communities rely on.

“With the right funding and powers, local government can play a vital role in supporting central government to deliver its ambitions for everyone in our country.”

Read the LGA's Autumn Budget Submission

Notes

  1. The LGA analysed local council spending data published annually by Department for Communities and Local Government to establish relative spending levels on services from general pots of funding, such as council tax. To forecast 2019/20 spending patterns, 2016/17 published budget figures were used with an assumption that social care and housing services will be prioritised within shrinking budgets.
  2. From 2016/17 onwards, the impact of the adult social care council tax precept has been reflected as projected by the Government in its spending power calculations.
  3. The figures exclude spending on police, fire and rescue services, as well as services delivered by parish councils.
  2010/11 actual 2019/20 forecast
  £1 of council tax means…     £1 of council tax means…    
Education 12.1p 7.87p
Highways 6.71p 5.8p
Public transport 3.84p 2.26p
Children's social care 12.88p 18.74p
Adult social care 20.03p 38.18p
Housing 4.8p 5.14p
Cultural services 6.98p 4.6p
Waste management 6.5p 6.04p
Other environmental services 1.78p 1.49p
Regulatory services 2.43p 1.43p
Planning and development 5.02p 2.6p
Central services 7.09p 5.93p
All other services; capital financing and other costs        0.03p 0p
Public health 0p 0.12p
Contribution to reserves 1.81p 0p
Total 100p 100p
 
Original article link: https://www.local.gov.uk/about/news/almost-60p-every-ps1-council-tax-could-be-spent-social-care-2020

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