Local councils face £1bn social care black hole as tax revenues fall short

Elderly and disabled people will have vital services cut as councils struggle to cope with a £1bn social care funding gap, town hall leaders have warned.

Authorities said they faced the huge shortfall even after council tax rises are taken into account.

Councils will be allowed to raise taxes by 2.99 per cent in 2019/20, and some will be able to add a further 2 per cent specifically for social care.

But the Local Government Association (LGA) said the money would "do little" to improve services.

It warned that limits on the amount that councils can raise taxes by in a three-year period mean 44 per cent of authorities that would otherwise have been eligible will not be able to introduce the 2 per cent social care levy.

Even if every council raises tax by the maximum amount allowed, there will still be a £1bn funding gap – a figure that is set to rise to £3.6bn by 2025, the LGA said.

Councils said they would be forced to divert money from other areas, including bus services, parks, libraries and leisure centres, to fund adult social care.

Councillor Richard Watts, chair of the Local Government Association’s Resources Board, said services were "at breaking point".

He said: “Extra council tax income for adult social care has been helpful in recent years. For many that option has run out this year and the extra money the rest will raise will do little to prevent those who rely on services seeing the quality and quantity reduce.

“Raising council tax has never been the answer to fixing our chronically underfunded social care system. It has raised different amounts of money in different parts of the country, unrelated to need, and risked adding an extra financial burden on households."

Councils in England now receive a combined total of almost 5,000 requests for adult social care a day, taking up nearly 40 per cent of their budgets.

Mr Watts said: “Investing in social care is the best way to keep people out of hospital and living independent, dignified lives at home and in the community. This is not only good for our loved ones but is proven to alleviate pressure on the NHS.

“Plugging the immediate funding gap facing adult social care and finding a genuine long-term funding solution must therefore be an urgent priority for the government.”

It comes as a report by the charity Independent Age found that the quality of care homes has dropped in more than a third of areas in the last year.

Care Quality Commission inspection data from January 2018 and January 2019 reveals that care homes have worsened in 37 per cent of local authority areas, it said.