Council tax rise unlikely to recompense funding cuts

The Local Government Association (LGA) has warned that council tax rises in 2017/18 will not bring in enough money to prevent the need for further cuts to local services over the coming year.

The news comes as local authorities are now able raise council tax by up to 1.99 per cent in 2017/18 to fund local services without the need for a referendum, with councils preparing to set out their final budgets.

Analysis from the LGA found: 147 of England's 151 social care authorities are considering or have approved introducing the social care precept in 2017/18 – this would raise £543 million to pay for social care services. The LGA is warning this extra income will be swallowed up by the cost to councils of paying for the Government's National Living Wage, which could total up to £600 million next year.

The research also identified that 108 of these councils (72 per cent) are considering or have approved introducing a three per cent social care council tax precept in 2017/18. 39 councils (25 per cent) are considering or have approved introducing a two per cent social care council tax precept in 2017/18; four councils have announced they will not take up the social care precept and intend to or have frozen council tax next year; and if all district councils use their full council tax flexibilities in 2017/18 they would raise an additional £60 million to fund local services.

Lord Porter, chairman of the LGA, said: “Extra council tax income will not bring in anywhere near enough money to alleviate the growing pressure on social care both now and in the future and the social care precept raises different amounts of money in different parts of the country.

"Social care faces a funding gap of at least £2.6 billion by 2020. It cannot be left to council taxpayers alone to try and fix this crisis. Without genuinely new additional government funding for social care, vulnerable people face an ever uncertain future where they might no longer receive the dignified care and support they deserve. This is not only worse for our loved ones but will also heap further pressure and wasted expense on the NHS.

"Councils need government to reverse these New Homes Bonus cuts next year and find genuinely new money to fund social care."