More pain for social care as Osborne cuts extra £445m from councils

Era of austerity will extend to 2018, says chancellor, as he announces further £4bn raid on welfare budget.

Picture credit: BBC News
Picture credit: BBC News

Social care is facing deeper cuts after chancellor George Osborne announced he would slash an extra half a billion pounds from local authority budgets in 2014 and extend austerity measures for an additional year until 2018.
 
In his autumn statement, Osborne said government funding for councils in 2014-15 would be reduced by a further 2% than planned, a move which the Local Government Association dubbed “unsustainable”.

“All it does is make the problem worse,” warned Association of Directors of Adult Social Services president Sarah Pickup. “We need additional resources, for adult social care in particular.”

Pickup said councils faced limited options in making further cuts to adult care. “Some councils are already in a place where they are doing things that they couldn’t keep doing, like holding down fees for providers. You can’t keeping doing that because the providers will not be able to deliver the care.”

She said the reduction announced today would also make it harder for councils to implement the care White Paper’s ambition of transforming social care into a service that promoted well-being rather than responded to crises.

Spending review cuts deepen

The 2010 spending review set out cuts to local authorities of 28% in real terms from 2011-15, partially compensated by annual transfers of NHS funding – worth £648m in 2011-12 and £622m in 2012-13 – to fund adult social care. The 2% cut to council budgets announced today is in addition to this.

And though the chancellor did not announce further cuts to council funding in 2013-14, the Local Government Association said measures previously announced had added a possible £1bn in cuts for next year to the 2010 spending review plans.

“While the government has rightly heeded calls from the sector for no new cuts to the central grant councils receive from government next financial year, local authorities already face a possible £1bn cut to funding for 2013-14 on top of the 28% reduction set out in the spending review and the further 2% announced for 2014-15,” said Merrick Cockell, chair of the Local Government Association.

Social care will be hit

“So far local authorities have largely restricted the impact of cuts to discretionary areas such as culture and environmental services, with councils working hard to protect spending on social care for children and the elderly. But even these areas are now facing reductions,” added Cockell. “That impact will only increase in line with any further cuts.”

Osborne will also slash an additional £4bn a year off the welfare bill by uprating most working-age benefits by just 1% a year for three years from 2013. This is in addition to £18bn-a-year’s worth of welfare cuts already announced under the 2010 spending review.

The 1% increase will apply to employment and support allowance, the replacement for incapacity benefit, as well as jobseeker’s allowance, income support and elements of child credit. But carers benefits and other disability benefits, such as the new personal independence payment, will be increased in line with inflation.

‘No choice but to further health integration’

Pickup said councils had to further integration with the NHS to try and manage reductions on the scale announced. She said there was potential for this to happen as many councils were building strong relationships with emerging clinical commissioning groups, which take over responsibility for commissioning healthcare from April 2013.

“We have no option but to grab the potential,” she added.

The NHS will remain broadly protected from real-terms cuts across the 2011-15 spending review period, though it must make efficiency savings of £20bn over the four years.

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