Councils keep tax rises low despite social care shortfall

25 Jan 07
Councils with social care responsibilities are anticipating increasing council tax by an average of just 3.6% in 2007/08 a 1% drop on last year despite claiming a funding 'crisis' for adult care services.

26 January 2007

Councils with social care responsibilities are anticipating increasing council tax by an average of just 3.6% in 2007/08 – a 1% drop on last year – despite claiming a funding 'crisis' for adult care services.

The anticipated increases were reported in the Local Government Association's annual survey published on January 22. These reveal that among those planning to hold tax increases below the retail price index of 4.6% are 15 councils that have had to restrict access to adult care services to those with only the most 'substantial' of needs.

LGA chair Sandy Bruce-Lockhart praised councils for their 'determination… to deliver an even better deal for the taxpayer and keep the rises down to a real-terms freeze'.

But he urged Chancellor Gordon Brown to address the funding crisis which leaves two-thirds of councils able to provide adult care services only to the most sick and disabled people.

Corin Thomson, senior policy consultant at the LGA, denied the association was being disingenuous. 'We could all raise council tax up to [the nominal cap of] 5% and that would put a little more money into the system, but what we've seen over time is government transferring responsibilities for care services on to council tax and it cannot take the strain,' she told Public Finance.

'Council tax is not the right vehicle to fund these sort of personal and welfare services: it wasn't designed for that. As soon as we edge up to 5% we get [public] outrage.'

Last year, the average council tax increase for local authorities providing social services was 4.6%.

Official figures collated by PF reveal that 35 of the 86 councils restricting care services to only 'substantial' and 'critical' needs had below-average council tax increases in 2006/07.

Seven of those also plan below-average increases for 2007/08.

They include Manchester City Council, which in 2006/07 increased its council tax by 3% to an average £730 per household, £326 below the national average. The Labour-held council has told the LGA it intends to raise the tax by just 2.5% for 2007/08.

Liberal Democrat-held Newcastle upon Tyne increased its average tax by 2.4% in 2006/07 to £913 and now plans to increase it by 2.9%.

Councillors in Leicester and Gloucestershire have also opted to continue holding increases and tax rates below the national average, despite reporting budget pressures on adult social care.

Roger Blackmore, the leader of Leicester City Council, told PF the below-inflation increase fulfilled an electoral pledge on behalf of the Conservative-Liberal Democrat alliance.

He denied that pledge was being delivered at the expense of the most vulnerable users of care services. They were, he said, the same people who struggled the most to pay high council taxes.

David Rogers, chair of the LGA's community well-being board, defended those decisions. 'My personal view is that adult social care is extremely important, and that councils need to bear that in mind when setting council tax levels in any particular year. But the whole point about localism is that circumstances are different in different parts of the country.'

Councils have claimed that inflation in the social care sector is running at 6.4%, and that there is a £1.8bn funding gap between the adult care services they need to provide and the resources they receive from central government.

Rogers told PF that low council tax increases were not exacerbating the problem. He said: 'Irrespective of this year's council tax rise, there is an enormous gap between the needs of our residents and the money available to provide care at the level we would want.'

But Ray Jones, former director of social services at Wiltshire County Council and visiting professor at the University of Bath said political expediency meant councils often hit their most vulnerable residents twice: 'Once through low council tax increases which lead to service restrictions and a second time through increasing the charges they can levy for those services.'

Paul Woods, City Treasury at Newcastle disagreed. The vast majority of Newcastle residents were not eligible for charges as they were too poor. But the council had pledged to keep tax increases down after previous increases had shot levels up beyond those in London. 'We're not under-funding social care, central government is,' he told PF.


Did you enjoy this article?