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Age UK says 10% Council Tax rise needed just for social care to ‘stand still’

Caroline Abrahams II

Council Tax bills would have to rise by an average of 10% next year to allow social care just to ‘stand still’, new research has found.

The Age UK analysis was issued amidst reports that the Council Tax is Chancellor Rishi Sunak’s chosen mechanism for increasing social care funding.

Age UK is urging the Chancellor to use his Spending Review, which is due on 27 October, to increase social care funding through central government reserves rather than via the Council Tax.

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Age UK found that Council Tax would need to go up by another 10% next year, just to raise £3.3bn, which falls short of the starting point suggested by the Health and Social Care Select Committee.

The hike would mean an average ‘band d’ household in England paying up to an additional £180 in Council Tax per year but the amount of cash generated would be highly unequal across the country.

The Institute for Fiscal Studies estimates that council tax increases in the richest ten councils could generate 45% more per person than in the poorest tenth.

Caroline Abrahams, Charity Director of Age UK and Co-Chair of the Care and Support Alliance (pictured) said: “Our new analysis shows that even if you make local people pay a whopping additional 10% in Council Tax – on top of the 19% average rise we’ve seen in recent years – it still won’t give social care all the money it needs, and meanwhile this intensifies the postcode lottery which means older people have much more chance of getting a decent care service in some places, compared to others. Social care provision is too important to too many people for its fate to depend on local politics and local tax bases.”

A Government spokesperson said: “We are taking action to fix the social care crisis across the country, investing an additional £5.4bn over the next three years to deliver a comprehensive programme of reforms, and introducing a new Health and Social Care Levy that will raise £12bn a year to fund the NHS and social care for the long term.

“We have also allocated more than £12bn directly to councils over the past 18 months – with more than £6bn available to spend as they see fit – recognising that councils are best placed to deal with local issues.

“The Spending Review will continue to focus on supporting jobs and delivering on the people’s priorities.”

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The author Lee Peart

1 Comment

  1. Instead of lumping 10% on everyone’s council tax bills or raiding some mythical capital reserve to pay for current expenditure, Age UK would be better advised to recommend that pensioners should be made to pay National Insurance Contributions for the first time. In return for this extra tax, all citizens will receive *proper* insurance against the full cost of needing care at home or to go into a care home, not the Government’s current quarter-baked model, which is to make working-age people and their employers pay higher NICs for a bit of nursing care.

    The cost for this insurance will of course be painful, but it will be far cheaper per person than trying to insure yourself privately against the risk of dementia etc, or the cost of going into a home, which can run into the hundreds of thousands if you have the misfortune of developing dementia or other long-term conditions. The insurance cost will be spread across all retirees, except those with low incomes who will be protected by thresholds, just like a low-paid employee protected from Class 1 or the self-employed NICs.

    The insurance should also be accompanied by a guarantee that all care funded by the State will be handled by the NHS as part of integrated care planning with other services; existing privately-owned care homes will either be taken over by the State or they will agree to operate on a contracted model, with fair funding determined nationally with local variations, and an Appeal Tribunal.

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