LGA: social care demand will use up half of council tax take by 2020

24 Mar 15

Over half of total council tax revenue will be used to pay for social care by the end of the decade, the latest analysis of the future of council finance by the Local Government Association has predicted.

It warned that the pressures presented by the ageing population, coupled with funding reductions, meant there would be a ‘huge squeeze’ on other services, such as road maintenance, street cleaning and running libraries.

Currently, adult social care accounts for around 30p in every pound of council tax spent, but this is predicted to rise to 40p by 2019/20.

When the cost of social care for children is added in, the total spent on social care provision will rise from around 45% of council tax spending to 60%.

By contrast, 1p in every £1 will be spent on street cleaning and flood defences, 5p on road maintenance and street lighting and less than 5p on libraries and other leisure and arts funding, according to the analysis.

LGA chair David Sparks said the figures showed that families all over the country would be impacted if central government continuing to reduce funding for local services.

Core government funding for councils has fallen by 40% since 2010 and in many councils the scope for efficiency savings is coming to an end, he added. ‘It is likely that people will be paying similar levels of council tax over the next few years but most will see a lot less in return. People are rightly going to question why their streets and parks are less well kept, the local library is closing and bus services are being cut when they are still paying roughly the same council tax each month. 

‘The reality is that, within a few years, well over half of the council tax everyone pays will have to be spent on social care.’

Sparks called on the next government to provide a fair funding settlement to local authorities in the next parliament to ensure they were able to better support services.

‘No part of the public sector has faced bigger cuts to funding than councils during this Parliament and the efficiency savings local government has made since 2010 cannot be made again,’ he added.

Responding to the figures, Sir Steve Houghton, chair of the Special Interest Group of Metropolitan Authorities and leader of Barnsley Council, said continued cuts would limit the ability of local authorities to deliver vital services to local communities.

Speaking to Public Finance last week, Houghton warned local authorities would face legal challenges over failure to provide statutory services during the next parliament if funding cuts persist.

Speaking today, he said the poorest in the country had been hit hardest by reductions.

‘Not only must the next government, whatever colour, protect local government funding but it must also recognise that there should be a fairer distribution of resources based on need to ensure that all authorities have the resources they require to provide statutory services.’

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