New analysis finds Council Tax would have to rise by an average 10% next year to allow social care just to ‘stand still’
Published on 14 October 2021 11:03 PM
New analysis finds Council Tax would have to rise by an average 10% next year to allow social care just to ‘stand still’
Costing an average ‘band d’ household up to £180 more a year - but with big variations across the country in how much cash each area could generate
Age UK urges the Chancellor to give social care the funding it desperately needs in his Spending Review – but from central Government coffers, not Council Tax
Stunt outside HM Treasury dramatises the Chancellor’s crucial Spending Review choice over social care funding
Amid consistent media reports that a rise in Council Tax is the Chancellor’s chosen mechanism for increasing funding for social care, Age UK warns that this approach will lead to hugely inflated Council Tax bills in some areas and yet will still not give care services the assurance of enough money to function properly. It would be much better for the Government to provide the extra funds social care needs from central Government coffers, the Charity says, rather than depending on the ability and willingness of local authorities to raise Council Tax even higher than it already is.
The Charity is supporting a Day of Action on Friday 15th October organised by the Care and Support Alliance, to persuade the Chancellor, Rishi Sunak MP, to give local authorities the extra funding they need in his Spending Review – but from central Government funds, not a Council Tax hike. The Alliance believes that Mr Sunak holds the future of social care, and the lives of millions of people in his hands, and that he could be a hero or a villain, depending on the spending decision he makes. In the presence of a group of older and disabled people, Age UK staged a ‘pretend fight’ between ‘Hero Rishi’ and ‘Villain Rishi’ outside the Treasury earlier this week, to dramatise the crucial choice the Chancellor has to make. The Charity sincerely hopes that when he announces the outcomes of the Spending Review, ‘Hero Rishi’ is the politician we all see.
On 7 September, as part of his plan to ‘fix social care’, the Prime Minister announced a one and half per cent rise in National Insurance, to help fund the NHS and social care. However, the proceeds go almost exclusively to support the NHS over the next two years, while meanwhile social care is desperately short of the funds required to provide older and disabled people with care and support. These millions of people cannot wait – for many of them two years will simply be too late.
The Government has made it clear that social care’s short and medium term funding requirements will be decided as part of the Treasury’s Spending Review, the outcomes of which the Chancellor, Rishi Sunak MP, will announce in about two weeks’ time. It would be hard to exaggerate how important the decisions Mr Sunak makes are to the future of social care services and the lives of the millions of older and disabled people who depend on them, the Charity says. A host of recent reports have evidenced the fragility of local care services; the lack of sufficient care staff; and the difficulties of local authorities in making insufficient funding ‘stretch’ to meet the needs of the increasing numbers of older and disabled people who are coming forward requiring help in their areas.[i][i] [ii][ii]
On the question of how much extra funding social care needs from the Spending Review, Age UK supports the view of the Health and Social Care Select Committee, which said recently that: “the starting point must be an increase in annual funding of £3.9bn by 2023–24 to meet demographic changes and planned increases in the National Living Wage. However, such an increase alone will not address shortfalls in the quality of care currently provided, reverse the decline in access or stop the market retreating to providing only for self-payers. Further funding to address these issues is therefore also required as a matter of urgency.” [iii][iii]
It is widely reported that the Treasury wants to use a Council Tax rise to help fill the yawning gaps in local authorities’ social care budgets over the Spending Review period. Specifically, it is believed that their intention is to raise the ceiling on how high local authorities can set their ‘social care precept’, or local tax, without the need to call a local referendum in order to gain public approval for the measure.
However, this is against a context of Council Tax having already risen by a massive 19% in the past four years[iv][iv] and now, new Age UK analysis has found that Council Tax would need to go up by another 10% next year, just to raise £3.3 billion[v][v] – a figure that gets close to but still doesn’t reach the starting point suggested by the Health and Social Care Select Committee.
This in turn would mean an average ‘band d’ household in England could be paying up to £180[vi][vi] more a year in Council Tax than previously, but the amount of cash it would generate would be highly unequal across the country. The Institute for Fiscal Studies estimates that council tax increases in the richest ten councils could generate 45% more per person than in the poorest tenth[vii][vii]. The Charity says that this would be extremely unfair and would also intensify the postcode lottery that already afflicts social care, leaving older people in some areas seriously disadvantaged if they need care and support.
Caroline Abrahams, Charity Director of Age UK and Co-Chair of the Care and Support Alliance said:
“For the sake of millions of older and disabled people, social care needs a big injection of extra funding now and over the next few years – but it should come from central Government, not by massively hiking Council Tax. Social care’s problems are national, as the Prime Minister recognised with his promise to ‘fix them once and for all’, so it’s not fair for Ministers to try to shift the responsibility onto local areas to stump up the cash.
“Our new analysis shows that even if you make local people pay a whopping additional 10% in Council Tax – on top of the 19% average rise we’ve seen in recent years – it still won’t give social care all the money it needs, and meanwhile this intensifies the postcode lottery which means older people have much more chance of getting a decent care service in some places, compared to others. Social care provision is too important to too many people for its fate to depend on local politics and local tax bases.
“It’s down the Chancellor now, Rishi Sunak MP, to decide how much funding to give social care over the next few years, and from which sources, in his Spending Review. The stakes could not be higher: his decisions will determine whether social care services continue to wither and die, just about stand still or, more optimistically, get stronger over the next three years.
“It was the Prime Minister who made the promise to give older people dignity in later life through his social care reforms - a fantastic goal - but it’s the Chancellor now, above all, who will determine whether we make progress towards it, or not. We are looking to him to do the right thing by supporting these vital services on which so many older people depend. The truth is that when it comes to social care Rishi Sunak could be a hero or a villain come Spending Review day – we just all so hope that it’s ‘the good guy’ we see.”
The Petition
Older people, disabled people and carers need Rishi Sunak to be their hero on the 27th October so they can get the help they desperately need. In the last 4 weeks over 50,000 people have signed a petition[viii][viii] calling for the Chancellor Rishi Sunak to provide funding to ensure people to get the support they need, and care workers get the pay they deserve. If he doesn’t millions will have no choice but to go without the help they need.
https://doesrishireallycare.com/
[ix][i] https://www.lgo.org.uk/information-centre/news/2021/sep/failing-social-care-system-reflected-in-relentless-rise-in-ombudsman-s-upheld-complaints
[x][ii] https://www.skillsforcare.org.uk/adult-social-care-workforce-data/Workforce-intelligence/publications/national-information/The-state-of-the-adult-social-care-sector-and-workforce-in-England.aspx
[xi][iii]https://committees.parliament.uk/publications/3120/documents/29193/default/
[xii][iv] Council tax has already risen by 19% in the past four years (Source: Council tax levels set by local authorities in England 2020 to 2021, Table 1: calculating Council Tax levels, England summary 2016-17 to 2020-21 (revised) Accessed here: https://www.gov.uk/government/statistics/council-tax-levels-set-by-local-authorities-in-england-2020-to-2021)
[xiii][v] In order for councils to raise the minimum £3.3 billion for social care to ‘stay still’ council taxes would need to rise by another 10% this year (Source: Council tax levels set by local authorities in England 2020 to 2021, Table 9: Council Tax requirement and chargeable dwelling figures – all authorities, 2020-21 (revised) Accessed here: https://www.gov.uk/government/statistics/council-tax-levels-set-by-local-authorities-in-england-2020-to-2021)
[xiv][vi] The average household in England could be paying up to £180 more a year than previously (Source: Council tax levels set by local authorities in England 2020 to 2021, Table 2: Council Tax (average Band D) in England 2020-21, and percentage change from 2019-2020: by class of authority (revised) Accessed here: https://www.gov.uk/government/statistics/council-tax-levels-set-by-local-authorities-in-england-2020-to-2021)
[xv][vii] Council tax increases raise less in poorer parts of the country where more properties are in lower tax bands. For example, increases of 4% a year would raise £89 per person in cash terms by 2024–25 in the richest tenth of council areas, compared with just £61 per person in the poorest tenth. https://ifs.org.uk/publications/15674
[xvi][viii]https://doesrishireallycare.com/