Councils warn of social services cuts in wake of modest formula grant rise

Council chiefs have warned they will have to cut social services funding over the next two years after they failed to win as much money as they wanted.

The government said this week that councils with social services responsibilities would get a minimum 2 per cent rise in formula funding in 2006-7 and at least 2.7 per cent more the following year.

Councils’ formula grant, excluding ring-fenced education funding, will total 24.8bn next year and 25.6bn in 2007-8.

Although the government has raised its initial offer and given councils greater security by informing them of their allocations for the next two years, the Local Government Association said this would not fully relieve pressures on local services, particularly in social care.

Last month it warned that councils faced a 2.8bn “black hole” in their finances, which included 660m for adult social care and 450m for children’s services (news, 3 November).

LGA chair Sir Sandy Bruce-Lockhart told Community Care this week that the government had not fully recognised the pressures on councils to care for an ageing population and the rising number of disabled people and people with learning difficulties.

“There are very difficult decisions to be made between service cuts on one hand and higher council tax on the other,” he said. “People don’t want to put council tax up because it particularly hurts the elderly.”

The government said there would be “no excuses” for authorities to raise council tax by more than 5 per cent in each of the next two years.

However, local government minister Phil Woolas promised to work with councils to look at managing pressures in adult social care.

Julie Jones, president of the Association of Directors of Social Services, said she was concerned about the lack of recognition within the settlement report and the pre-Budget report of developments in adult social care, particularly with the white paper on social care and health due early in the new year.

Local government finance settlement from www.local.odpm.gov.uk
Pre-Budget report: www.hm-treasury.gov.uk