Adult and children’s services ‘face £3.2bn funding gap’

Adult social care and children’s services budgets in England will face a combined funding gap of almost £3.2bn by the end of the decade, local government leaders have claimed.

Analysis by the Local Government Association found that children’s services will see a £1.9bn gap emerge between funding and need from 2016-17 to 2019-20, while adult social care will be hit by a £1.25bn shortfall over the same period. The figures were included in the LGA’s submission to the Treasury ahead of the chancellor’s Autumn Statement next month.

The children’s services shortfall refers to non-ring fenced funding on children’s social care and education services, on which councils currently spend £11.1bn. The LGA said councils were facing rising demand without additional government funding to meet it, and pointed to the number of child protection plans having risen by 60% since 2008.

“It is wrong to allow such an unsustainable pressure to build up on a service that protects our most vulnerable children,” it said.

Local authority children’s services did not receive any additional funding in the 2015 spending review. The Treasury did hand councils new tax raising powers, the social care ‘precept’, to boost adult social care funding and also promised to invest an additional £1.5bn in these services through the Better Care Fund by 2019-20. However, under current plans, only £105m of this is due to become available next year, £825m in 2018-19 and the full £1.5bn in 2019-20.

The LGA calculated that even with this additional revenue, councils will still face a £1.3bn funding gap by 2019-20 when forecasting for demand, inflation on provider fees and the impact on the care sector of the introduction of the National Living Wage in April 2016, which boosted wages for many care workers.

“If this gap is not plugged we are likely to see more care providers leaving the market, cuts to care services, and risk the safety and quality of care,” the LGA said.

It warned that the foundations of the adult social care system were “extremely unstable”, and pointed to a recent survey of social services directors showing that half of local authorities in England had seen a home care or residential care provider exit the market in the first half of 2016.

The LGA called on the government to bring forward £700m of the promised additional Better Care Fund investment as the funding was “urgently needed” to tackle immediate challenges facing services. The association had previously called for this £700m to be made available in the current financial year.

It also recommended ministers should look to reform business rate use and council tax setting powers to allow councils to take “financial decisions which are right for their local area”.