December 2015 – Council Tax Rises to Fund Social Care
Responding to calls for action to ease a nationwide funding crisis in social care, the Chancellor said in his autumn statement that local authorities will be allowed to raise council tax by up to 2% as long as the extra money is spent on social care.
The rise in the number of elderly people as well as a desire to keep them in their homes rather than looking after them in crowded hospitals, has placed local authority budgets under huge pressure.
However, in response to this statement, the Local Government Association has stated that home care services for the elderly in deprived areas will have to be scrapped except for those in the most desperate need. The warning comes as official figures show that wealthier parts of the country, where demand for care services is often lower, will be able to raise their social care budgets by three times as much as the poorest regions. This, the LGA says will create a postcode lottery for social care, in a funding system that completely fails to address the long-term needs of the elderly and those in need of help at home.
The proposal will benefit richer regions most, as higher property values mean they can raise far more by increasing council tax. By contrast, poorer areas, where council tax accounts for a much smaller proportion of their total incomes, will be able to raise far less and will, as a result, be less able to offset the latest round of central government funding reductions.
The LGA calculates that Osborne’s latest cuts will mean a further 24% cut in councils core funding by 2020, on top of cuts of more than 40% in the last parliament.
Investigations by the Observer, based on detailed analysis of all councils finances, show massive disparities in the ability to use council tax to offset central government cuts. The London borough of Newham will be able to raise its funding by only 4.1% compared with 11.3% for Kingston-upon-Thames, 12.4% for Buckinghamshire and 13% for Wokingham in Surrey.
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