Council Tax Hike Will Not Prevent Cuts To Local Services – LGA

Council tax rises in 2017/18 will not bring in enough money to prevent the need for further deep cuts to local services next year, the Local Government Association (LGA) warns today (20 February).

All councils can raise council tax by up to 1.99% in 2017/18 to fund local services without the need for a referendum – most district councils can increase by £5 per year at Band D level.

England’s 151 social care authorities can increase council tax by up to a further 3% in 2017/18 (up to 4.99% in total). Income from this extra precept must be spent on social care.

With town halls across the country preparing to set their final budgets and council tax levels over the next few weeks, analysis by the LGA reveals 147 of England’s 151 social care authorities are considering or have approved introducing the social care precept in 2017/18 – this would raise £543m to pay for social care services.

“All councils are being pushed perilously close to the financial edge after years of funding reductions…”

The LGA is warning this extra income will be swallowed up by the cost to councils of paying for the Government’s National Living Wage, which could total up to £600 million next year.

The Association for Public Service Excellence (APSE) report published in November last year warned that residents are beginning to see a decline in local services as a result of cuts to council budgets, and in December it was revealed that England’s household recycling rate had fallen for the first time since 2011. Some suggested cuts to services are partly to blame.

At the time, Andrew Bird, Chair of the Local Authority Recycling Advisory Committee, said: “We are obviously disappointed that the rates have gone down for the first time. But when waste services are competing for a reduced budget with adult care, education and social services it is clear something is going to give. We need to establish new funding streams into local authorities to ensure the recycling rate increases again.”

More Cutbacks Ahead

With local government facing an overall funding gap of £5.8bn by 2020, council leaders warn council tax rises will not prevent the need for continued cutbacks to local services, including social care.

Councils will also have to continue to divert more money from other local services, including filling potholes, maintaining parks and green spaces and running children’s centres, leisure centres and libraries, to try and plug growing social care funding gaps.

The LGA is calling on government to use the final Local Government Finance Settlement this month to provide new money for social care.

Lord Porter, LGA Chairman, said: “Services supporting the most vulnerable people in our communities are at breaking point and many councils are increasingly unable to turn down the chance to raise desperately-needed money for social care and other local services next year.

“But extra council tax income will not bring in anywhere near enough money to alleviate the growing pressure on social care both now and in the future and the social care precept raises different amounts of money in different parts of the country.

“Social care faces a funding gap of at least £2.6bn by 2020. It cannot be left to council taxpayers alone to try and fix this crisis.

“Without genuinely new additional government funding for social care, vulnerable people face an ever uncertain future where they might no longer receive the dignified care and support they deserve. This is not only worse for our loved ones but will also heap further pressure and wasted expense on the NHS.

“All councils are being pushed perilously close to the financial edge after years of funding reductions. Two thirds will be forced to find millions of pounds more in savings than they were expecting next year following cuts to the New Homes Bonus.

“Councils need government to reverse these New Homes Bonus cuts next year and find genuinely new money to fund social care.”

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