London Councils undermines claim of extra £2bn for adult care

Government claims that it is providing an additional £2.1bn a year to fund adult social care from 2011-15 have been further undermined by research showing that it will be more than outweighed by cuts to councils made in last month’s spending review.

London Councils calculated the share of local authorities’ general formula grant that the government notionally allocates for adult care, and found that it would fall from £10.2bn to £7.2bn a year from 2011-15, more than cancelling out the £2.1bn. This amounts to a 16% cut in real terms.

“Our analysis shows that the extra funding for social care will be disappear because of overall funding decreases,” said a London Councils spokesperson. “The extent of overall cuts to local government funding, and the heavy front-loading [of cuts], makes it very difficult for councils to protect social care funding in the way that government is suggesting.”

Following the spending review on 20 October, Community Care reported that the £2.1bn did not amount to extra funding because of the overall cut to councils.

The government rejected London Councils’ analysis. “The analysis fails to take account of locally-raised income which was not affected by the spending review, for example council tax,” said a Department for Communities and Local Government spokesperson. “Formula grant is unringfenced and cannot be broken down in this way.”

However, London Councils stressed that government funding allocations could be broken down by service area even though councils were free to spend the money as they wished.

Though the government’s analysis shows that local government spending will fall less steeply once council tax and other locally-raised income are taken into account, compared with the impact of Whitehall spending cuts alone, this will affect different areas differently.

Poorer areas that are more dependent on central government income will face steeper cuts in spending than other localities.

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