The Chamberlain News

Flat cash and flexibility on social care funding fail to convince

Councils across England will continue to benefit from the long-term financial certainty of  a 4-year funding settlement, while at the same time having extra flexibilities to deliver adult social care services, according to Department for Communities and Local Government. Political leaders in Birmingham and the West Midlands are far from convinced. 

Communities Secretary Sajid Javid pledged to stick to the individual allocations that were published just 12 months ago, as the second year of the 4-year plan, when announcing to Local Government Finance Settlement to the House of Commons today.

It means over the 4 years of the settlement, councils will receive “almost £200 billion in government funding – ensuring they can deliver the frontline services people value, while at the same time cutting waste.”

As anticipated, Mr Javid announced plans for councils to have the flexibility to increase the dedicated social care precept by up to 3% next year if they choose – “equivalent to £1 a month on an average Band D Council Tax bill.” This comes on top, says DCLG, of a £240 million social care grant for councils next year.

Communities Secretary Sajid Javid said:

For years councils have worked well delivering the services local communities need – we’re determined to help that continue. The historic 4-year funding settlement gives authorities the certainty they need to plan ahead, with almost £200 billion available over the Parliament.

This government is committed to making sure this is a country that works for everyone and that our most vulnerable in society get the support they need. Today’s additional funding and flexibility will mean councils will have £7.6 billion in total dedicated social care funding over the 4 years of the settlement to do just that.

The settlement is broadly flat in cash terms. In return for greater certainty councils were required to publish their efficiency plans online – providing greater transparency for residents.

In total, DCLG says 97% of councils took up this offer and in doing so accepted the 4-year settlement. Those that rejected this certainty will have to wait for their allocations to be confirmed each year.

John Clancy, leader of Birmingham city council, commented:

The announcement by the Communities Secretary that local authorities can increase a council tax precept to help fund social care from a planned two per cent to three per cent over the next two years will do very little to plug the gaping hole in local authority social services budgets.

A three per cent council tax rise will raise about £9 million for Birmingham city council. But this has to be seen in the context of our annual £250 million expenditure on adult social care.

This is a sticking plaster solution designed to fix a problem that desperately needs major surgery. Birmingham city council’s spending on adult social care has halved since 2010, falling by an average ten per cent a year as a result of unprecedented cuts in Government grant.

Half of all houses in Birmingham are in council tax bands A and B, properties worth less than £120,000, so the social care precept will be paid by the poorest citizens in Birmingham.

This is a Poor Tax on the poorest Brummies devised by a Government that simply isn’t prepared to face up to its responsibilities and fund social care properly.

The Government should stop obsessing about Brexit, which is going to happen anyway, and focus instead on adequately funding the social care needs of older people.

Cllr Robert Alden, leader of the Birmingham Conservative Group, said:

What this announcement shows is had the Labour Council delivered on it’s agreed budget last year the Council would not have to had consulted on any additional savings this year. Sadly here in Birmingham the Council have lost all control of the finances and Labour have run up a huge blackhole. The Council’s spending power actually increases each year after next year so there are no excuses for the Council to be cutting services for vulnerable people.

Birmingham will be getting the largest Better Care Fund settlement in the Country and the third highest Adult Social Care Support Grant. Yet Labour claim the Government has it in for the City. Are they really saying that the City getting the highest grants in the Country is a bad thing? I can see it is embarrassing for the Labour Council to be given these extra funds at a time they have lost control of the Council budget, but they need to get their house in order and deliver the first class Council the City deserves.

Mr Javid says that more money is not the only answer, and highlighted the importance of better integrating health and social care. The government says it will develop long-term reforms that will provide a sustainable system for everyone who needs social care, in order to finish the job of integrating health and social care systems.

Liberal Democrat shadow health secretary Norman Lamb called the social care funding measures a “gutless stealth tax rise” and raised concerns that council tax rises would only accentuate the postcode lottery in care provision.

By 2020, councils as a whole will be able to spend locally what they raise locally, including through 100% business rates retention. Today, the government confirmed that devolution deal areas including the West Midlands will join pilots in London, Manchester and Liverpool in the 2017 to 2018 financial year.

Speaking on behalf of the West Midlands Metropolitan Council Leaders, Councillor Bob Sleigh, Leader of Solihull Metropolitan Borough Council, said:

I welcome this announcement from the Government. It’s the next step towards further devolution to the region, and gives us a real incentive to work with others, including the Combined Authority, to generate growth in the region.

If we succeed that will be good for businesses, good for the people they employ, and good for the local authorities in the region. We look forward to working with the Government over the next few weeks in sorting out the fine detail of the agreement for the pilot.

Meanwhile, West Midlands Police and Crime Commissioner David Jamieson’s responded to the Police Grant Report England and Wales 2017/18:

The cuts from central government are more than twice as big this year as they were last year.

This funding settlement fails to recognise that crime is changing and not falling. It will be a bitter disappointment to the people of the West Midlands who have seen their police force hit harder than anywhere else in the country.

Last year the government promised no cuts to West Midlands Police, but once again we are getting less money than the year before and the government is expecting local people to pick up the difference in their council tax payments.

DCLG says the New Homes Bonus will also be retained and reformed. It will include a new threshold after which payments would begin, and councils receiving bonus payments for 5 years in 2017 to 2018 and 4 years from 2018 to 2019 on each new additional home built – with councils free to spend those funds as they see fit to meet local priorities.

Shadow communities and local government secretary Teresa Pearce described the settlement as “all smoke and mirrors”, claiming that the £240m from the New Homes Bonus would “barely make a dent” in the social care funding gap. She added:

The council tax precept has already proven to be an inadequate and short-term sticking plaster for a problem which needs long-term answers. This will simply not meet existing need.

She called for a long-term solution to the problem, claiming that the elderly and disabled were suffering as a result of government “inaction.”

Lord Porter, Chairman of the Local Government Association said it was “hugely disappointing” that the settlement failed to provide any “genuinely new additional government funding” for social care. He said it was wrong to treat the New Homes Bonus reforms as new funding but a redistribution of funding already promised to councils. Lord Porter (Con) called on the Government to urgently review social care and health ahead of next year’s spring Budget and ensure that the voices of local government leaders are heard.