More pain for social care staff and services in Osborne’s Budget

Councils face further cuts in 2014-15 and budgets will be restricted in 2015-16 to limit pay rises to 1%, announces Chancellor George Osborne in 2013 Budget.

George Osborne
Chancellor George Osborne. Photo: Nils Jorgensen/Rex Features

Council social workers face a sixth year of real-terms pay reductions and social care services are set for deeper cuts on the back of chancellor George Osborne’s Budget today.

Council budgets will be limited in 2015-16 to restrict pay rises to 1%, below the expected rate of inflation, said the chancellor. According to Unison, council social care staff in England, Wales and Northern Ireland, have seen their pay fall in real terms by 16% on average since 2009 due to a succession of pay freezes, and the next two years will see further real-terms cuts.

Councils involved in the National Joint Council for Local Government Services, the national collective bargaining mechanism with unions, have offered staff either a 1% rise for 2013-14 in exchange for a reduction in some working conditions or a “no strings” 0.6% rise, prompting unions to consult on strike action. This is at a time when inflation, measured by the Retail Price Index, is running at 3.2%. Council staff also face a pay rise of 1% on average in 2014-15 in line with Osborne’s public sector pay policy.

Further cuts next year to councils

Osborne said councils would face an additional 1% reduction in funding from Whitehall in 2014-15, on top of reductions estimated to total 33% in real terms from 2011-15 by the Local Government Association, a total slightly offset by annual transfers of cash from the NHS to councils to spend on adult social care, worth £859m this coming year

The LGA described the additional cuts as “extremely worrying” at a time of mounting pressures on children’s and adult social care.

“Reducing the money available for local services would be a false economy which diminishes those services, leads to higher costs in other parts of the public sector and limits the role councils can play in promoting growth,” said LGA chair Merrick Cockell.

“Councils are already dealing with a 33 per cent cut in funding from central government. This has led to reductions in local services. Any new cuts next year and beyond will have a significant negative impact, particularly as the rising cost of services such as adult social care and changes to National Insurance are already guaranteed to soak up an increasing share of local government funds.”

More welfare cuts

Osborne also signalled deeper cuts to welfare spending in 2015, a year in which £11.5bn will be reduced overall from public spending, bringing the total down to £694bn. The full details on spending reductions will be announced at the next government spending review on 26 June.

As had been previously trailed, Osborne used the Budget to bring forward the introduction of a cap on “reasonable” social care costs incurred by individuals from 2017 to 2016. This will be introduced at £72,000, instead of the £75,000 limit that had been pencilled in for 2017, a difference that reflects the impact of inflation. In addition, the threshold below which people get some state support with residential care costs will rise from £23,250 now to £118,000 in 2016, when the cap is introduced. The measures will cost an estimated £1bn a year.

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