Local authorities have been granted the right to raise council tax by up to 5.99% next year in a bid to tackle the social care funding crisis.
In its Provisional Local Government Finance Settlement yesterday, the Government announced that councils would be able to increase core bills by 3% in April without holding a referendum, up from 2% currently. Councils were also given the power to increase the social care precept by up to 3% in 2018-19.
Communities Secretary Sajid Javid said: “Our historic four-year funding settlement gave authorities the certainty to plan ahead; with over £200bn available over the spending period.
“However, I am aware of the pressures facing councils and this is why I am giving them more flexibility, so they have greater control over the money they raise to address local needs.
“This strikes a balance between giving councils the ability to make decisions to meet pressures and ensure that our most vulnerable in society get the support they need while protecting residents against excessive Council Tax bill rises.”
The Government said that by giving councils greater flexibility, in combination with the £2bn additional funding announced in March, it was providing £9.25bn for social care over three years.
While welcoming the greater flexibility in setting in Council Tax bills, Lord Porter, Chairman of the Local Government Association (LGA) called on the Government to go further and abolish the referendum limit to give communities the right to say how their local services are paid for.
Surrey County Council abandoned plans earlier this year to hold a referendum on a 15% Council Tax rise for social care, instead hiking bills by 4.99% (see Surrey Council abandons 15% social care tax).
Lord Porter said adult social care services were at tipping point, adding: “Years of unprecedented central government funding cuts have left many councils beyond the point where council tax income can be expected to plug the growing funding gaps they face. Local government faces an overall funding gap of £5.8bn by 2020.”
Margaret Willcox, President of the Association of Directors of Adult Social Services (ADASS), said the announcement was a “further blow for social care”, branding a 1% increase in Council Tax funding “woefully inadequate”.
The ADASS president said Council Tax “raises least funding in the areas of greatest need and is not the best solution to address the impending crisis facing the sector”.