The Chamberlain News

Social care council tax levy will be ‘swallowed up’ by cost of paying Living Wage

Almost all of the money generated by a two per cent council tax increase to fund social care for elderly and vulnerable people will be swallowed up by the cost of introducing the Government’s Living Wage, town hall bosses have warned.

Local authorities have been given permission to levy a two per cent supplement on top of a maximum 1.99 per cent council tax rise in order to meet the soaring cost of social services.

Birmingham is one of scores of councils preparing to approve the one-off social care precept, making a total council tax increase for 2016-17 of 3.99 per cent, the largest for several years.

But in common with all other local authorities the city faces a huge bill to deliver the living wage to low-paid care workers from April.

City council leaders have decided to create the Birmingham Care Wage, which will be set at £7.50 an hour, equivalent to a 12 per cent pay rise for carers. But the cost of the increase may be more than the £5 million that can be raised through a two per cent council tax increase.

The Local Government Association said today that nine out of 10 councils in England would approve the social care levy, raising a total of £372 million. But the cost to councils of paying the living wage is estimated to be £330 million, leaving just £42 million to fund social services directly.

England’s 152 social care councils, including Birmingham, are also set to suffer because they will receive £2.5 billion less core revenue support grant from the Government in 2016-17.

The LGA is urging the Government to bring forward nearly £700 million of new funding earmarked for social care through the Better Care Fund by the end of the decade to 2016-17.

Council leaders warn council tax rises are unlikely to prevent the need for continued cutbacks to social care services and that the quality and availability of care for older and disabled people will continue to deteriorate.

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

Cllr Nick Forbes, LGA vice-chair, said:

The Government expects local authorities to raise council tax by nearly four per cent next year, including a two per cent precept to pay for under pressure social care services.

With no council tax freeze grant next year, a Government funding settlement that assumes council tax increases and growing funding pressures, many councils feel they have no choice left but to put up council tax.

After years of striving to keep council tax as low as possible or frozen, town halls find themselves having no choice but to ask residents to pay more council tax over the next few years to offset some of the spiralling costs of social care in 2016-17.

At the same time, they are warning communities that despite council tax rising, the quality and quantity of services on offer could drop, as the income will not be enough to offset the full impact of further funding reductions next year and with the National Living Wage bringing a significant further cost pressure from April.

Councils will continue to do all they can to maintain the services that older and vulnerable people rely on but services supporting the elderly and disabled are at breaking point. It cannot be left to council taxpayers alone to try and fix them.

Vulnerable members of the community still face an uncertain future next year where the dignified care and support they deserve, such as help getting dressed, fed or getting out and about, remains at risk. Vital social care services will increasingly be unable to help ease the growing pressure on the NHS and the threat of a care home crisis is still very real.

That is why, at the very least, the planned £700 million of new funding from the Better Care Fund should be brought forward to 2016/17 in order to help alleviate growing social care pressures.