Local government budget cuts of 28% threaten to cancel out the extra money found by the government for social care.
Chancellor George Osborne admitted he was giving councils a tough settlement but insisted that he would give them new powers to make it easier to choose where they could make cuts.
“For local government, the deficit we have inherited means an unavoidably challenging settlement,” he said. “There will be overall savings in funding to councils of 7.1% a year for four years.
“But to help councils, we propose a massive devolution of financial control.”
Although the government promised £2bn extra for social care, the Department for Communities and Local Government will receive £5.6bn less each year. The majority of this would have been passed on to councils.
“This spending review will hit councils and the residents they serve very hard and will inevitably lead to cuts at the frontline,” said Baroness Eaton, chairman of the Local Government Association.
“Town halls will now face extremely tough choices about which services they can keep on running. These cuts will cause real pain and anxiety for millions of people who use the services councils provide, from keeping children safe to ensuring that streets are clean.”
Councils will be free to spend most of their cash how they please, rather than how the government stipulates, allowing them to decide the extent to which they prioritise care.
Ring-fencing for all revenue grants paid to councils will end next April. The number of core grants received by councils will fall from 90 to fewer than 10.
“I suspect most councils cannot afford to ring-fence social care across their organisation and cut elsewhere,” said Chris Buttress, local government partner at consultants PricewaterhouseCoopers. “Social care, despite the extra funding, will still have challenging issues to address.”
Buttress said councils had gained flexibility, but there had been “political finessing” at work with the government, leaving local leaders with painful decisions on what to cut.
He said children’s services would be badly hit by the overall local government spending cuts, with no headline announcement on extra money to be spent solely in the sector. However, Buttress predicted the pupil premium, given to encourage the best schools to take children from difficult backgrounds, could result in benefits to children’s social care.
Andy Sawford, chief executive of the Local Government Information Unit, said: “The cuts to local government budgets are huge and unprecedented. They will fundamentally alter the way that councils work and the work that councils do.”
The Treasury claims local government services that protect the vulnerable will be “relatively protected”, with disabled facilities grants rising with inflation and £6bn of funding for the Supported People programme over the next four years.
However, council capital projects face cuts of 45%.
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