Long-term Care Solution Kicked Further Down the Road
Posted on March 08, 2017
From our members’ point of view, the Spring Budget offered more good news than bad in the short-term, but demonstrated that the Chancellor’s line of sight remains firmly fixed on immediate issues.
Though this is understandable, it unfortunately does little to address the fact that local authorities are still looking to Government for long term solutions.
Social Care
While the Spring Budget brought with it the announcement of additional support for social care that so many of us have been pressing for, the welcome from councils will be a cautious one.
The announcement of additional £2bn to councils in England over the next 3 years, to bridge the gap until the bulk of Improved Better Care Funding is available in 2019-20, should offer councils some valuable breathing space.
We were also pleased with the announcement that the distribution of this would be based predominantly on the Improved Better Care Fund formula – which already exhibits a strong correlation with demonstrable need.
But, having recently had sight of allocation figures which appear to contain a number of, as yet, unexplained anomalies between the amounts authorities will receive in each year, we do have some concerns about how this has been practically applied and intend to query this with DCLG to ensure full transparency and fairness for all councils.
While this provides councils and health bodies some short-term respite, our principle concern is that, with a green paper setting out the Government’s thinking on options for the future financing of Social Care not due to be published until later this year, a long term solution for one of councils’ greatest and fastest growing cost pressures may simply be being kicked further down the road.
Schools
Many councils will also be concerned about the treatment of education funding. Existing schools across the country are currently facing real terms budget cuts of 8% through unavoidable cost pressures associated with: higher national insurance contributions, teachers’ pensions, the introduction of the national living wage and the apprenticeship levy.
With the sector also expected to absorb a £600m cut to the Education Services Grant, announced in 2016, some head teachers are already being forced to consider extreme cost-saving solutions such as cutting the number of school days offered each week, simply to make ends meet.
In this context, the announcement of an additional £216m for school maintenance spread over the next three years is worryingly low.
Frustrations in this area are likely to be further compounded by the announcement of a one-off payment of £320m for 140 new free schools. What is most concerning here is that this spreadsheet smoke and mirrors effectively reveals that cutting the Education Services Grant was entirely avoidable.
Business Rates
The decision to allocate £300m in business rates relief will no doubt be welcomed by the ratepayers who have lobbied so effectively, and it is certainly welcome that councils have been given greater discretionary flexibility to support struggling businesses.
This said, since the rates for over two thirds of businesses, particularly in the North of England will stay the same or fall as the result of revaluation we do have some reservations about the use of scarce resources in damping a change designed to more fairly reflect the economic inequality in different parts of the country.
It is therefore essential that the Government gets the allocation method of this funding right to ensure it is used to support struggling businesses across the country, and not just those that happen to be based in some of the fastest growing and most affluent areas.
The rates announcement also sets welcome precedent, and one worth building upon. Despite the pending transition that would see local government retain 100% of business rates, councils still have little control over the levers of incentivisation and support for local businesses. We would argue that central Government could therefore expand this approach, offering councils greater control over Small Business Rate Relief and Charitable Relief to give them the practical agency to support the Government’s clear ambitions for local self-sufficiency.