Extra council tax not enough for under-pressure services

Although many local authorities are increasing their council tax for the next financial year, the Local Government Association has warned that many communities will still see a reduction in local services.

England's 152 social care authorities can increase council tax by up to a further three per cent in 2018/19, in addition to the 2.99 per cent increase for general council tax that all councils have been able to enforce for 2018/19.

While the addition of the adult social care precept is expected to raise an extra £548 million to pay for social care services, the LGA has warned that this ‘will be wiped out by the cost of paying for the government’s National Living Wage’, while authorities also risk having to pay at least £400 million in back-pay liabilities for sleep-in carers.

Further calculations by the association show that central government cuts of £1.4 billion for this year will only be eased by an approximate £584 million for local services raised through increasing general council tax by 2.95 per cent, of which 108 councils are known to be doing.

The LGA has urged the government to ‘urgently address the growing funding gaps facing local services’ and provide the financial sustainability and certainty needed to protect the local services that communities rely upon, such as funding funding roads and local transport, maintaining parks and green spaces and running children’s centres, leisure centres and libraries, to try and plug growing funding gaps in adult social care, children’s services and homelessness support.

Lord Porter, chairman of the LGA, said: “Faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services. The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face. Extra social care funding will be wiped out by the significant cost pressures of paying for the government’s National Living Wage and extra general council tax income will only replace a third of the central government funding they will lose this year.

“This means councils will have to continue to cutback services or stop some altogether to plug funding gaps. It is unfair to shift the burden of tackling a national crisis onto councils and their residents. The need for adequate funding for local government is urgent. To maximise the potential of local government and protect local services from further cuts, funding gaps must be properly addressed and local government as a whole must be allowed to keep all of the business rates it collects locally each year to put it on a sustainable footing.”