Council tax powers will raise only a fraction of social care cash needed, say MPs
Plans to give local authorities the power to raise council tax by an extra 1% will generate only a fraction of the funding shortfall in social care, a senior Labour MP has claimed.
Clive Betts said the proposals unveiled by ministers would raise £250 million next year, while the Local Government Association believes councils need an extra £2 billion to meet care costs.
Communities Secretary Sajid Javid (pictured) said the changes would boost councils’ core spending power by more than £1 billion by 2019/20.
There were also warnings from a Tory backbencher that his council had “run out of road” and would be unable to fund its statutory functions in 2019/20 without any changes.
Mr Betts, chairman of the Communities and Local Government select committee, said: “I welcome some aspects of the statement, such as the increase in money from planning fees.
“But in terms of flexibility on council tax increases, will the Secretary of State confirm the figures given to me by the Local Government Association (LGA) that even if that flexibility is fully used, it will raise just £250 million next year.
“That compares with the LGA’s estimate of the shortfall in funding for social care of over £2 billion, even after the measures announced previously by the Government are taken into account.”
Mr Javid said: “What I can tell him in terms of the extra flexibility for council tax, what it will mean is the total core spending power this financial year, which was £44.3 billion, will rise to £45.6 billion by 2019/20.
“It is an increase in real terms, so there’s a real growth in core spending power in each of those next two years.”
Kettering MP Philip Hollobone raised wider concerns about funding, saying: “Northamptonshire County Council might be the local highways authority, but I have to tell the Secretary of State that it’s run out of road.
“It will set a legal budget for 2018/19, but it’s making it clear that it won’t be able to finance its statutory functions in 2019/20 unless something changes.”
He added that part of the solution was restructuring.
Mr Javid said the Government’s proposals would lead to additional funding for Northamptonshire.
He added: “He makes a wider point, more an issue about longer term sustainability, and he will know I am ready to consider any proposal that comes forward for restructuring.”
A number of Labour MPs reiterated concerns from the party’s front bench about the pressure on children’s services.
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