Local authorities freed to hike council taxes to pay for social care

LONDON, ENGLAND – OCTOBER 28: Chancellor George Osborne departs Downing Street on October 28, 2015 in London, England. Yesterday Chancellor George Osborne promised to bring tax credit spending under control despite suffering a defeat in the House of Lords last night. (Photo by Ben Pruchnie/Getty Images)

The Chancellor of the Exchequer confirmed today that councils will be free to increase council tax by up to 2% above the current cap of 1.99% as long as the full amount of the increase is spent on social care.

Currently, councils have to put their plans to a local referendum if they want to increase council tax by more than 2% per year, but this will no longer be required.

The measure, if adopted by all eligible councils across the country, will raise around £500 million per year.

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Industry associations that have been lobbying hard for more money to resolve what they describe as a crisis in care funding were far from impressed.

“Even if all councils increase council tax by 2%, it would raise less than £500m next year. The  #Homecare sector alone = £753m deficit in 2016-17,” tweeted Colin Angel, Policy director & spokesman at United Kingdom Homecare Association.

Care England added that the council tax plan had the potential to raise least money in the deprived parts of the UK that need it most. “In areas most needful of #socialcare, council tax is hardest to raise. Even if every council raised [council tax] by 2% – it would only offer £500m next year,” it tweeted.

Mary Riddell, a columnist for the Daily Telegraph, predicted that the plan will come nowhere near covering demand and need. “Expect a £4 billion funding gap by 2020,” she said.

The additional £500 million per year is also entirely conditional on all councils taking up the offer to raise council taxes by 2%, Care England said.

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