“Osborne tax” still leaves adult care services facing billion-pound black hole

  • Council tax measure to shield adult care from cuts plugs just 30 percent of funding gap
  • National adult care shortfall could be more than a billion pounds this year alone
  • Severe cuts to frontline care services set to continue for rest of the decade

By Chaminda Jayanetti

Powers to raise council tax to help fund care for the elderly and disabled will cover less than a third of the funding gap facing those services this year, leaving a potential £1bn financial black hole.

Last November, Chancellor George Osborne gave councils the right to raise council tax by two percent solely to spend on adult care – the “social care precept” – on top of the existing maximum two percent tax rise that can be spent on all services.

However, responses to a Freedom of Information request by Sentinel News found that councils implementing the council tax rise still faced gaping black holes in their adult care budgets, amid a funding crisis that has worsened every year during the course of government austerity.

Among the 63 councils that provided figures to Sentinel, the two percent council tax rise covered an average of just 31 percent of their forecast adult care funding shortfall in 2016/17.

The remaining funding gaps must be met by cutting services, increasing charges to care users, raiding other council budgets or skimming reserves.

The combined shortfall across all 63 councils is £623m, with the social care precept covering £165m of that – just 26.5 percent, barely a quarter of the shortfall. This is lower than the 31 percent average for each council, because higher population councils with larger adult care budgets fare worse than relatively small local authorities.

Applying the revenues from the social care precept leaves a £458m combined black hole across the 63 councils this year, which will have to be met mostly through cuts. There are 144 councils in total across England adopting the social care precept. Most of these did not provide figures, but extrapolating from the councils that did, the total adult care budget funding gap in 2016/17 is likely to be just over £1bn – again, most of which will have to be met through cuts, either to adult care services or from other council functions.

Newcastle City Council has the biggest shortfall, with its two percent social care precept raising £1.733m towards its £15m adult care budget shortfall – just 11.55 percent.

The council passed a budget cutting adult care staff, slashing funding for mental health recovery support, and removing all funding for telecare services, among a variety of adult care service cuts.

Walsall, Islington and Northamptonshire also said that the social care precept would cover less than 15 percent of their respective adult care budget shortfalls.

Most councils have raised council tax by four percent this year – two percent for adult care, two percent for general spending – but even if every penny of increased council tax revenue was ploughed into adult care services, it still wouldn’t close the funding gap.

Doing so would also leave big shortfalls elsewhere in council budgets, such as children’s care services, because of the cuts to local government funding from Whitehall.

Sentinel asked councils for the forecast shortfall in their adult care budgets for 2016/17, “including cost pressures and central government funding cuts, but prior to applying any savings proposals, fee increases, and forecast revenue from the council tax adult care precept”, and to state how much the adult care precept would raise.

A national picture

The wording was designed to capture the full extent of council funding shortfalls before savings and revenue-raising measures are applied. Some councils may have allowed themselves leeway in interpreting the wording, but even if potential outliers are excluded, the data remains broadly similar – around 30 percent of budget shortfalls covered by the adult care precept, with the rest to be made up through cuts or raiding council reserves.

There are 152 councils in England that fund adult care services, of which eight did not raise the adult care precept; the 63 respondents to our FOI request are 44 percent of those that did. The request was sent before councils had finalised their 2016/17 budgets, so many did not yet have full information. But the 44 percent that did are a representative group of English local authorities – from all regions, of all types, sizes and political hues.

Our findings also chime with those of the King’s Fund, which calculated that councils across England will raise £382m through the social care precept in 2016/17 towards an estimated adult care funding shortfall of £1.2bn – again, covering roughly 30 percent of the gap, though leaving a smaller deficit of around £800m.

Some councils reported a healthier picture – York City Council even said that the precept would cover virtually its entire adult care funding gap. Leicestershire County Council reported 80 percent coverage of its shortfall. But overwhelmingly, councils found the social care precept raising less than half the required funds.

The full data is here (note that Barnet only applied a 1.7 percent social care precept; all other listed councils applied two percent):

Council Adult care
inital shortfall
Social care precept revenue Coverage of shortfall Net
shortfall
York £1,600,000 £1,500,000 93.75% £0.1m
Leicestershire £6,000,000 £4,760,000 79.33% £1.24m
Cheshire East £5,900,000 £3,400,000 57.63% £2.5m
Wiltshire £7,800,000 £4,322,000 55.41% £3.478m
North Lincolnshire £2,200,000 £1,200,000 54.55% £1m
Tower Hamlets £2,900,000 £1,478,000 50.97% £1.422m
Hartlepool £1,300,000 £655,000 50.38% £0.645m
Southampton £3,460,000 £1,580,000 45.66% £1.88m
Poole £2,900,000 £1,300,000 44.83% £1.6m
West Sussex £17,000,000 £7,300,000 42.94% £9.7m
Barnet £5,400,000 £2,253,000 41.72% £3.147m
Stockton £3,613,000 £1,428,000 39.52% £2.185m
North East Lincolnshire £2,800,000 £1,100,000 39.29% £1.7m
Doncaster £4,560,000 £1,770,000 38.82% £2.79m
Oxfordshire £15,231,000 £5,883,000 38.63% £9.348m
Calderdale £4,000,000 £1,481,000 37.03% £2.519m
Thurrock £3,000,000 £1,100,000 36.67% £1.9m
Portsmouth £3,500,000 £1,250,000 35.71% £2.25m
Middlesbrough £2,600,000 £888,000 34.15% £1.712m
Gloucestershire £13,965,000 £4,700,000 33.66% £9.265m
Medway £5,700,000 £1,900,000 33.33% £3.8m
Cheshire West and Chester £9,018,000 £2,935,000 32.55% £6.083m
Swindon £4,900,000 £1,594,000 32.53% £3.306m
Bradford £9,500,000 £3,076,000 32.38% £6.424m
Devon £20,278,000 £6,500,000 32.05% £13.778m
Somerset £12,100,000 £3,800,000 31.40% £8.3m
Camden £6,046,000 £1,834,000 30.33% £4.212m
Wigan £6,700,000 £2,000,000 29.85% £4.7m
Lincolnshire £15,600,000 £4,500,000 28.85% £11.1m
Herefordshire £5,900,000 £1,700,000 28.81% £4.2m
South Gloucestershire £7,800,000 £2,246,000 28.79% £5.554m
Central Bedfordshire £8,700,000 £2,500,000 28.74% £6.2m
Kent £39,500,000 £11,200,000 28.35% £28.3m
Windsor & Maidenhead £4,300,000 £1,200,000 27.91% £3.1m
Milton Keynes £6,930,000 £1,900,000 27.42% £5.03m
Bedford £5,271,000 £1,430,000 27.13% £3.841m
Brighton & Hove £8,607,000 £2,307,000 26.80% £6.3m
Cornwall £18,331,000 £4,724,000 25.77% £13.607m
Peterborough £4,811,000 £1,221,000 25.38% £3.59m
Sefton £8,500,000 £2,129,000 25.05% £6.371m
East Sussex £19,000,000 £4,700,000 24.74% £14.3m
Redbridge £7,300,000 £1,800,000 24.66% £5.5m
Redcar & Cleveland £4,251,000 £1,040,000 24.46% £3.211m
Blackpool £4,000,000 £929,000 23.23% £3.071m
Durham £16,319,000 £3,574,000 21.90% £12.745m
Bury £6,600,000 £1,353,000 20.50% £5.247m
Isle of Wight £6,747,000 £1,367,000 20.26% £5.38m
Haringey £8,500,000 £1,700,000 20.00% £6.8m
Southend £6,700,000 £1,291,000 19.27% £5.409m
East Riding of Yorkshire £14,142,000 £2,695,000 19.06% £11.447m
Halton £4,200,000 £800,000 19.05% £3.4m
Rochdale £7,400,000 £1,400,000 18.92% £6m
Knowsley £3,000,000 £560,000 18.67% £2.44m
Essex £60,000,000 £11,000,000 18.33% £49m
Luton £7,000,000 £1,222,000 17.46% £5.778m
Sunderland £9,100,000 £1,580,000 17.36% £7.52m
Liverpool £16,403,000 £2,831,000 17.26% £13.572m
Greenwich £8,100,000 £1,360,000 16.79% £6.74m
Hackney £8,000,000 £1,300,000 16.25% £6.7m
Shropshire £15,400,000 £2,400,000 15.58% £13m
Northamptonshire £33,000,000 £4,900,000 14.85% £28.1m
Islington £10,600,000 £1,500,000 14.15% £9.1m
Walsall £13,690,000 £1,900,000 13.88% £11.79m
Newcastle £15,000,000 £1,733,000 11.55% £13.267m
TOTAL £622,673,000 £164,979,000 26.50% £457.694m

 

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