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Local government

Social care precept changes will not help those living in more deprived areas

Commenting on today’s announcement, Paul Dossett, Head of Local Government, Grant Thornton UK LLP said:

“The government’s changes to council tax and the social care precept, announced by the Secretary of State for DCLG as part of the latest local government finance settlement, will seem to many as nothing more than a temporary fix. There is real concern about the postcode lottery nature of these tax-raising powers that are intended to fund our ailing social care system – and rightly so.  Adult social care represents a major demand in all parts of the country but there is certainly no evidence or causality between demand and council tax base.

“Our analysis on social care demonstrates that the most deprived areas in the UK derive the lowest proportion of their income from council tax. The government’s intention in allowing councils to increase council tax and ring-fence further increases for social care budgets is to spread the financial burden of the nation’s rising social care bill. But for councils in more deprived areas, making that decision is not an easy one. They will be left wondering just how much of this bill they can reasonably expect to place on their residents. Council tax payers in deprived areas may be less likely to be able to afford the increase, and many of these who are on low incomes will already be paying reduced rates.

“Conversely, more affluent areas collecting more council tax will potentially receive a bigger financial benefit from these measures. Our analysis on social care shows that the impact and effectiveness of the existing social care precept is not equal across authorities. So any further changes to tax raising powers for local government will not tackle the crisis of social care in our most disadvantaged communities and arguably make only make a small dent in the cost demands in our more affluent communities.

“While the changes to the social care council tax precept from 2% to 3% over the next two years, rather than 2% over the next three years as originally planned, are welcome, they do not provide additional funding. The changes are also dependent on decisions made by individual councils. Given the need and that the majority of councils introduced the 2% precept for 2016/17 however, we would expect a high level of take up.

"The government missed the opportunity to bring forward some of the £1.5bn additional funding for social care through the Better Care Fund already announced for 2019/20. Instead, the Secretary of State has announced plans to provide a health and social care integration policy framework.

“The UK has a long tradition of providing care to those who need it most. If that is to continue, the government must invest in a robust social care system that can cater for all based on needs and not on geography. From a taxpayer’s perspective this is a zero sum game. For every £1 not invested in social care, the cost to the NHS is considerably more.”