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Ministers consider council tax rise to cover social care funding

Local authorities could be allowed to make a further increase in council tax to pay for social care.

Ministers in England are discussing ways to invest more money into care services for the elderly and disabled.

One option is to let them increase council tax beyond the extra 2% for which they already have permission, while another is bringing forward extra money they have been promised in 2019.

It comes as fewer people are getting help from local authorities.

This includes places in care homes and nursing homes as well as help in the home for daily tasks such as washing and dressing. Councils only fund services for the poorest, with those with assets of more than £23,250 expected to pay the full cost of care themselves.

Council spending on care has fallen by 9% in real terms over the past five years with local government blaming cuts to their funding from central government.

Services for older people have been particularly badly hit.

  • The number of people getting help from their council with care fell by 26% to 850,000 in the four years to 2014
  • More than 1.2m people with care needs now receive no formal or informal help
  • Care firms, which provide the services for councils, are pulling out of home care contracts
  • The number of care home and nursing home places has fallen by 1,500 in the past six years to 16,600

Regulators have warned these cuts have started adding to pressures in the NHS with A&E units said to be bearing the brunt.

Old and frail patients are being admitted because of the lack of community support, which is also being blamed for the growing number of delayed discharges – cases where patients are ready to leave hospital but cannot.

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Ahead of last month’s Autumn Statement there were suggestions the government would invest more money into social care, but it was not included in Chancellor Philip Hammond’s announcements.

However, ahead of the local government financial settlement for 2017-18, which is expected this week, the Treasury is understood to be discussing ways in which funding could be increased.

The prime minister’s spokeswoman refused to comment on the speculation, but said an announcement would be made soon.

One option is to allow councils to increase the 2% precept they applied this year by even more in the coming years.

The second is to use the Better Care Fund. That is a pot of money councils share with the NHS, which is worth £3.9bn this year and is due to increase by £1.5bn in 2019.

Many have argued the extra funding should be brought forward.

State of care for the over-65s

1.2 million

people with care needs go without help

  • 4 in 10 people in care homes pay for themselves
  • 300,000 fewer people receive council-funded help than four years ago
  • £100,000 or more spent on care by 1 in 10 people

Martin Green from Care England, which represents care providers, told BBC Radio 4’s Today programme that funding problems in the industry were “reaching a crisis point”.

“Research shows that about 40% of care services will no longer be viable in the medium term, so this is a huge number of care services that will be lost, some companies will definitely go bankrupt,” he said.

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He added that the precept funding model had problems, adding: “In the majority of local authority areas they raised the precept, but there is no clear audit trail to say has all that money reached the front line.”

NHS v social care

Graphic spending

NHS: Budget controlled by NHS England and pays for hospitals, GPs, district nursing and mental health care. Services are provided free at the point of need.

Care: Budget controlled by councils and pays for care home and nursing home places as well as support in the home for tasks such as washing and dressing. Services are means-tested so only the poorest get help towards their costs.

Conservative councillor Izzi Seccombe, of the Local Government Association, said that increasing the precept “would not plug” any funding gap.

She said the £383m raised from a previous 2% precept was eclipsed by larger costs, such as the £600m cost of the national living wage increase.

‘Savage cuts’

A key problem with the precept system, she added, was variation in the amount of money raised between wealthy and poorer areas, creating a “postcode lottery”.

“We are trying to integrate health with social care and yet the health system is based on national taxation.

“We need an injection now of £1.3bn because there is a shortfall by 2020 of £2.6bn.”

Labour’s shadow social care minister Barbara Keeley said the crisis has been “caused by savage Tory cuts to the budgets of local councils”.

“The right solution would be for Theresa May to admit the Tories have got it wrong and deliver the needed funding for social care,” she said.

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“Asking taxpayers and councils to pick up the bill for their failure is no substitute for a proper plan.”

Andrea Sutcliffe, the chief inspector for adult social care, told The Times: “We’ve got increased demand and potentially a restriction on capacity.

“Unless we really get to grips with some of these problems… we will get to an absolute crisis.”


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