London councils warn of £420 million adult funding loss

Writes Derren Hayes

London councils could lose £420 million of government funding for adult social care under proposals being considered by the department of communities and local government.

As part of its consultation on the local government funding formula, the DCLG is looking at whether to move to a new method of distribution that according to umbrella body London Councils is “unfair, inaccurate and overly simplistic”.

It says the new formula particularly penalises urban areas – which the current arrangements protect – and does not take full account of people with complex disabilities and multiple needs, such as mental health and drug problems.

Analysis by LC shows that by removing the existing protection, known as ‘damping’, London councils would receive funding for just 68% of their current adult social care expenditure.

The biggest losers would be Richmond upon Thames council, which would see its budget cut by 37%, amounting to £6.2m, Kensington and Chelsea by 22.1% (£22.7m) and Hammersmith and Fulham by 21.2%  (£23.8m). Just three London authorities would gain money.

LC chairman Merrick Cockell, said: “If the government bows down to pressure and applies the raw funding formula without funding protection, it could have serious long-term implications for the future provision of social services for vulnerable adults in the capital.”

However, areas in the north and midlands would be set to benefit if the DCLG backs the new formula. The Special Interest Group of Municipals Authorities outside of London says that the current system “subsidises affluent London boroughs” at the expense of deprived areas in the rest of the country.

A final decision on the funding formula should be made by the end of the year.

More information

London Councils

Department of Communities and Local Government