Freedom for local councils to increase local taxes by up to 2% to pay for elderly care will be used by 94% of town halls in England.
Research by the Local Government Association has found that 143 out of 152 councils in England have approved or are considering plans to introduce the “social care precept” from April.
However, the association does not believe that the hike in council taxes will bring in enough money to alleviate the growing pressure on the elderly care sector.
Almost all of the extra £372 million that the precept would raise will be swallowed up by rising salaries as the National Living Wage kicks in. The LGA estimates this will cost the sector at least £330 million, with the greatest burden being felt in less affluent areas of England where increasing council tax by 2% will raise the smallest amounts.
Bunty Malhotra, director of Prestwick Care, which runs a dozen care homes in the North East, says that central government must step in to ensure that money reaches the poorest areas that will struggle most with the National Living Wage.
“Imposing the National Living Wage has not been thought through. If you look at the North of England and other areas that are not as affluent as in the South, then the challenge is more acute,” he told Care Home Professional.
“The Chancellor followed up with an announcement that council tax rates can increase by 2% to pay for care services. But even increased council tax revenues in the North of England will not raise nearly enough money to cover the increased cost of paying the National Living Wage. In the South, business rates and council taxes generate much more than they do in the North,” he added.
Town halls across the country will be setting their final budgets and council tax levels over the next few weeks. After years of funding pressures, many councils – including those who have frozen council tax for years – say they are unable to turn down the chance to raise desperately-needed money for social care next year.
LGA analysis suggests the funding crisis facing local councils outside the affluent South could get worse when the Revenue Support Grant from central government to local councils is cut by £2.5 billion in 2016/17.
Council leaders want the Chancellor to use his Budget to bring forward £700 million of new funding earmarked for social care through the Better Care Fund by the end of the decade to 2016/17.
Cllr Nick Forbes, LGA vice chair, said: “After years of striving to keep council tax as low as possible or frozen, town halls find themselves having no choice but to ask residents to pay more council tax over the next few years to offset some of the spiralling costs of social care in 2016/17. At the same time, they are warning communities that despite council tax rising, the quality and quantity of services on offer could drop, as the income will not be enough to offset the full impact of further funding reductions next year and with the National Living Wage bringing a significant further cost pressure from April.
“Councils will continue to do all they can to maintain the services that older and vulnerable people rely on but services supporting the elderly and disabled are at breaking point. It cannot be left to council taxpayers alone to try and fix them.
“Vulnerable members of the community still face an uncertain future next year where the dignified care and support they deserve, such as help getting dressed, fed or getting out and about, remains at risk. Vital social care services will increasingly be unable to help ease the growing pressure on the NHS and the threat of a care home crisis is still very real.
“That is why, at the very least, the planned £700 million of new funding from the Better Care Fund should be brought forward to 2016/17 in order to help alleviate growing social care pressures.”