The Government’s £2.4billion business rates ‘windfall,’ not further increases in Council Tax, should be used to plug the social care funding gap, according to Nottingham City Council’s Deputy Leader.
Councils up and down the country are facing tremendous pressures on their budgets and calling on the Government to provide a long-term sustainable solution to the shortfall in social care funding.
The Chancellor is understood to be actively considering a further increase to the social care precept on council tax – currently set at 2% – ahead of the financial settlement for local government to be announced this month.
But Councillor Graham Chapman says rather than place the burden on local councils and local taxpayers, the Government should instead use the £2.4billion of central funding it is set to receive each year over the next three years in unallocated business rates. This ‘windfall’ has come about because the Government now receives more in business rates from councils than it gives back in revenue grant funding.
The social care precept has been criticised as it is insufficient to even cover inflationary and National Living Wage costs for care providers and meanwhile, pressure from increasing demand for services has continued to rise. Additionally, the precept works in favour of more affluent areas with higher council tax revenues at the expense of more disadvantaged areas including Nottingham.
Nottingham City Council has had to find an additional £16million over the last few years to meet the increasing demand for adult social care services while at the same seeing its funding from Government for day-to-day services fall by half, with the total additional cost of adult social care to the council set to reach £54million by 2019/20.
The medical profession, social care providers and leaders from across the political spectrum have warned of the consequences if the Government does not act. These include closures of care homes, providers of care going out of business or handing back contracts to councils and increases to waiting times for assessment for elderly and vulnerable people.
Councillor Chapman said: “It’s clear to everyone that we need more money for social care but there are better ways to do this than the Government simply loading more and more costs onto council taxpayers.
“The social care precept already allowed by the Government is deeply flawed and favours better–off areas of the country as they are able to raise more money. As a result, the money does not reach the less well-off places where it’s needed most and as a result, elderly people in deprived areas miss out.
“Using the business rates surplus would allow billions of pounds of investment to be put into social care and help provide decent support where it’s needed most for some of the most vulnerable people in society.”