Sajid Javid announces £900m funding available for council social care services

Sajid Javid has claimed almost £900 million extra will be available to local authorities over the next two years to fund social care services.

The Communities Secretary said up to £208 million could be raised in 2017/18 and £444 million in 2018/19 by plans to allow English local authorities to bring forward council tax increases totalling 6% over the next two years.

He added a £240 million “adult social care support grant” will be created for 2017/18 by reforms to an existing scheme designed to encourage councils to build extra properties, known as the new homes bonus (NHB).

Labour said people face higher taxes but worse public services for their money.

Mr Javid also said the Government will not pay the NHB from next year if authorities fail to meet the “national baseline for housing growth of 0.4%”, telling MPs this will ensure the cash rewards additional housing rather than normal growth.

The Cabinet minister said from 2018/19 he will also consider “withholding” the NHB from local authorities which are “not planning effectively by making positive decisions on planning decisions and delivering housing growth”.

Proposals to force larger town and parish councils to hold referendums over sizeable council tax rises will be deferred, Mr Javid added.

Making a statement in the Commons, Mr Javid said there is a “need for action” to meet the costs of caring for vulnerable people – with councils spending billions of pounds each year.

He told MPs: “Over recent months we have listened to, heard and understood calls from across the board saying funding is needed sooner in order to meet short-term pressures.

“So today I can confirm savings from reforms to the New Homes Bonus will be retained in full by local government to contribute towards adult social care costs.

“I can tell the House that we will use these funds to provide a new dedicated £240 million adult social care support grant in 2017/18 to be distributed fairly according to relative need.”

Mr Javid added: “Last year we agreed to the request from many leaders in local government to introduce a social care council tax precept of 2% a year, guaranteed to be spent on adult social care.

“The precept puts money raising powers into the hands of local leaders who best understand the needs of their community and are best placed to respond.

“In recognition of the immediate challenges that are facing the care market, we will now allow local councils to raise this funding sooner if they wish.

“Councils will be granted the flexibility to raise the precept by up to 3% next year and the year after.

“This will provide a further £208 million to spend on adult social care in 2017/18 and £444 million in 2018/19.

“These measures, together with the changes made to the New Homes Bonus, will make almost £900 million of additional funding for adult social care available over the next two years.”

Shadow communities minister Jim McMahon could be heard saying “passing the buck” as Mr Javid said councils will need to “justify” social care precept rises to their taxpayers.

Mr Javid went on: “It’s worth noting the extra flexibility to raise funding for adult social care next year will add just £1 a month to the average council tax bill – and the overall increase to the precept in the next three years will remain at 6%, so bills will be no higher in 2019/20.”

On the NHB, Mr Javid outlined measures designed to encourage more house building.

He said: “I can confirm today that from next year we will introduce a national baseline for housing growth of 0.4% – below this, the New Homes Bonus will not be paid.

“This will help ensure the money is used to reward additional housing rather than just normal growth.

“From 2018/19 we will consider withholding New Homes Bonus payments from local authorities that are not planning effectively by making positive decisions on planning applications and delivering housing growth.

“To encourage more effective planning we will also consider withholding payments for homes built following an appeal.”

Mr Javid said a consultation on this will take place.

He added the number of years for which NHB payments are made will be reduced from six years to five years in 2017/18 and to four years for 2018/19.

Mr Javid said this is the NHB cash which will be used to create the new social care fund.

Addressing the prospect of referendums linked to council tax rises for larger town and parish councils, Mr Javid said: “We have decided we will defer our proposals this year while keeping the level of precept set by town and parish councils under close review.

“I expect all town and parish councils to clearly demonstrate restraint when setting increases that are not a direct result of taking on additional responsibilities.

“I’m also actively considering with the sector ways to make excessive increases more transparent to local taxpayers.”

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