Local government secretary Sajid Javid said the government is preparing further reforms to the social care system as he confirmed a £240m transfer from the New Homes Bonus to boost adult social care funding in the local government settlement.
Setting out the final local government settlement last night, which is the second of a four-year funding deal for most authorities, Javid said the switch of money, coupled to the ability to raise a 3% social care precept though the council tax, would provide almost £900m of additional funding for adult social care over the next two financial years.
However, more money is not the only answer, he stated. “We will bring forward reforms to provide a sustainable market that works for everyone who needs social care. And I welcome the consensus across both sides of the House that every area should move towards the integration of health and social care services by 2020, so that it feels like one service.”
Javid’s statement comes after Surrey County Council has abandoned plans to hike council tax by 15% citing government willingness to address the sector’s funding crisis.
In his statement to MPs, the local government secretary praised the work of local authorities in “getting on with the job” amid reductions in spending. “Public satisfaction with local services has been maintained, and councils are engaged in substantial efforts to modernise, transform local services, and reduce waste so that frontline services can be protected,” he highlighted.
He urged councils to use the additional certainty of the four-year funding deal offered by his predecessor Greg Clark to get on with reforms to improve efficiency, through both in back-office functions and front line service delivery.
“Building on the £508m savings already delivered from shared service arrangements, councils are using improved digital technology, new delivery models and innovative partnerships to deliver savings across local government,” he added.
Responding to the publication, Sean Nolan, the director for local government at CIPFA, said the settlement contained “nothing unexpected”.
The chronic underfunding of social care was the most urgent issue for many councils, and the without a longer term settlement around funding, the government’s plan to fully localise business rates in 2019-20 would fail.
“While CIPFA cautiously welcomes the increase to 3% of social care precepts, this is a short term sticking plaster offering no additional medium term funding and as yet no sustainable long term solution,” he added.
While setting out some of the existing grants that will in future be paid for by the extra income retained locally under the scheme, the government must set out all the additional responsibilities that would be devolved sooner rather than later, he added. "It also must be clear that the additional £12.5bn to be retained locally to pay for these new responsibilities factors in the rates relief already promised to certain parts of the business community. As well as outlining the incentives for councils to grow business rates."
Local Government Association chair Lord Porter said it was “hugely disappointing” that the settlement did not provide any additional funding for town halls.
“Cuts to New Homes Bonus funding will leave two thirds of councils having to find millions more in savings than expected to plug funding gaps next year,” he said.
A funding shortfall in social care will hit at least £2.6bn by 2020 and “it cannot be left to council taxpayers alone to try and fix this”, Porter added.
“Councils, the NHS, charities and care providers remain united around the desperate need for new government funding for social care. By continuing to ignore these warnings, social care remains in crisis and councils and the NHS continue to be pushed to the financial brink.
“The government cannot ignore this any longer. Genuinely new government money for social care is urgently needed.”