Council tax precept could rise to tackle social care crisis

12 Dec 16

Ministers are considering allowing local authorities to levy a higher council tax precept to fund social care services ahead of the local government settlement.

Reports today state the government will give authorities responsible for social care powers to raise the social care precept – which was introduced in April – by more than the 2% they are currently mandated to.

According to The Times, ministers are considering raising this threshold, with the potential for no limit on the precept having been discussed. However, they are likely to opt for a cap when the local government settlement is published, most likely later this week. The prime minister's spokeswoman has refused to comment on the speculation, but stated that an announcement would be made soon.

Responding to the reports, Richard Humphries, assistant director of policy at the King’s Fund think-tank, said the social care safety net was “increasingly threadbare”.

Addressing this is a key test of prime minister Theresa May’s commitment to a more equal country that works for everyone, Humphries added.

“Allowing local authorities to raise council tax would provide some welcome extra funding, but our analysis shows this would raise only a relatively small amount of money and would widen existing inequalities as less affluent areas are able to raise less,” he stated.

“It would be much better to raise funding by bringing forward money from the Better Care Fund. Even if there is more funding for social care in the short term, there would still be an urgent need for a cross-party debate on how we sustainably fund health and social care in the future.”

According to Humphries’ analysis of the first year of the precept, the £382m it raised would not cover the £612m estimated cost of the national living wage for social care providers, let alone demographic and other cost pressures.

In addition, councils with the greatest need for extra funding will raise the least through the precept, due to the distribution of local housing stock in the council tax banding system.

“A reasonable proxy measure of social care need is the extent of income deprivation among older people,” Humphries stated.

“On this measure, the 10 least deprived council areas this year will raise almost two-and-a-half times as much from the precept as the 10 most deprived. The amount raised per head of the adult population varies from £5 in Newham and Manchester, to £15 in Richmond on Thames (£10 in the prime minister’s Maidenhead constituency).

“If anything, more deprived areas have suffered bigger cuts in spending, so the precept will widen existing inequalities. The government says it tends to equalise these differences through the new 'improved' Better Care Fund, but it is not clear how this will work in practice.”

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