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Funding for adult social care in England was given the widely expected boost in Chancellor George Osborne’s Spending Review with local councils able to raise a 2% levy. The council tax rise has the potential to raise £2bn a year by 2019 to 2020, however, any funds raised have to be ring-fenced to be spent on adult social care.

The Spending Review also committed an extra £1.5bn a year to the Better Care Fund by 2020, which local authorities will be able to access from 2017-18, but there was no extra funding for children’s services.

Council tax ‘optional’

Whilst the adult social care announcement appears good news for local government and social workers delivering such care in communities, there remain areas of concern over the funding.

As the council tax levy is optional, critics fear it has the hallmarks of a postcode solution amid concern that wealthier areas of the country will be able to raise more money than less affluent council areas where there are fewer people working and paying council tax, yet where demand for adult social services is often higher.

Analysts suggest the £2bn a year will be enough to support 50,000 older people in care homes, or around 190,000 in their own homes. But there is also the issue of whether the option to impose the 2% rise will be influenced by local political considerations. 

Central grant cut

Other factors contained within the statement, which saw police and health budgets preserved and plans to cut tax credits scrapped, revealed that local government central grant is to be cut by 56% over the next four years from £11.5bn this year to £5.4bn in 2019/20.

Council revenue and business rates is expected to increase by 13.1% over the same period – from £28.8bn to £35.1bn – with councils able to retain 100% of all business rate revenue by the end of the parliament. The announcements came amid speculation over whether local authorities would be able to withstand any further efficiency savings as the Chancellor sought to make multi-billion pound savings.

Health budget rises

The health budget in England will rise from £101bn to £120bn by 2020-21 with the NHS in England to get upfront cash injection of £6bn next year as part of £10bn added funding, though it is still expected to make efficiency savings.

There will be an extra £600m earmarked for mental health services and the Better Care Social Fund is to increase by 1.9%. Yet with closer integration between health and social care, the relationship between the two sectors and how each will benefit from additional funding, remains to be seen.

Mr Osborne’s Spending Review statement acknowledged that many local authorities were not going to be able to meet rising demands for social care without a new source of funding.

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