What do Bury, Bolton, Brighton, Middlesbrough, Leicester, Kent, Stoke-on-Trent, Southampton, Somerset, Bradford, Cheshire East, Hampshire, Oxfordshire, Wakefield, Coventry, North Northamptonshire, and Peterborough all have in common?
These are the 17 Local Authorities in England that, in the last month alone, have either issued a serious warning about their financial position, requested a financial bailout from central government, or announced significant service cuts (including to social care services) despite planning to raise Council Tax by the maximum permitted 5% per annum. And those are just the ones I’ve read about; I’m sure there are others. Clearly, Councils right across England, run by every main political party, and spanning both rural and metropolitan areas, are all giving the same warnings.
Additionally, it has recently been announced that upper tier councils will receive an additional £500 million for children’s and adult social care in 2024/25 and that lower tier districts will receive a boost of approximately £30-£40 million. Coupled with previous announcements, this increased available core funding by 7.5% compared to 2023/24. Whilst the most recent round of emergency funding is welcome – this again only papers over the cracks and does little to solve the long term financial problems that are being faced across the country.
Having been long ignored by the political class, the challenges facing local authorities is finally getting some attention. A cross-party group of MPs kicked off February by describing the situation as an “out-of-control financial crisis” and warned that, despite the Government’s interventions, Council’s still faced an annual £4bn shortfall. They concluded by noting that, “long-term reform is vitally needed. The funding model for local councils is broken”.
The causes of this systemic local government funding crisis are clear. The money Councils receive from central government underwent a real-terms cut of 40% between 2010 and 2020. In return, Councils were permitted to keep more of the money they raised locally from residents and business rates, but this served only to further exacerbate the gap between the wealthy and deprived parts of the country. A 5% increase in Council Tax in Surrey raises £84 per household per year, while in Stoke it is just £52.
Deprived areas also experience the greatest demand for Council funded services, further piling pressure on already constrained budgets. Middlesborough, for example, spends 83% of its annual budget on providing social care, largely driven by having three times the national average number of older people admitted to care homes each year, and three times the national average number of children placed on a child protection plan. So, whilst all Councils have felt the effects of a rapidly ageing population and an explosion in children’s social care spending (children’s home fees have doubled in the last five years), this impact has not been felt equally.
For his part, the Prime Minister has been quick to politicise the woes of certain Councils, most recently bankrupt Labour-run Nottingham, but he conveniently neglects to mention these same pressures are plaguing Conservative-run Councils too.
The impact of these local government financial pressures will be felt by every voter, regardless of if they use, or work in, social care services as councils look to fill their budget shortfalls by cutting services such as winter road gritting, bin collections, highway maintenance, libraries, homelessness services, and just about anything else that isn’t legally mandated.
Over the course of 2024, politicians will be focused on the major issues that dominate opinion polls, including NHS pressures, tax cuts, inflation, and immigration. Meanwhile, social care, which is unlikely to get more than a passing mention, sits at the heart of all these debates as inflation continues to eat away at their budgets and drives up the cost of care by more than the headline rate.
Planned immigration reform, including introducing a limit on the number of dependents able to join overseas healthcare workers in the UK and increasing salary requirements, will only add to the sector’s pressures. Social care services have relied on migrant workers to replace domestic ones over the past year, and yet still has more than 150,000 vacancies nationally and a 33% annual turnover rate.
Workforce – and addressing this vacancy and turnover challenge – should arguably have been the big theme of the year, particularly following the Government’s recent announcement of a new care career pathway and new care qualification. Whilst welcomed after such a long wait, this plan is reliant on workers seeing care as a career and being willing to undertake improved training and meet higher standards. But with better training will come demands for higher pay, and, without increased fees, many providers will simply be unable to meet these demands or compete against other sectors, including NHS Healthcare Assistant roles.
Elsewhere, and with one eye on the general election and Labour’s poll lead, there is much to like about Labour’s plan to bolster employment rights in the care sector – but this is similarly only deliverable if providers have the money needed to pay sick leave and holiday pay, with many providers relying on Councils paying fees that can facilitate this investment in the care workforce.
Ultimately, it doesn’t matter whether it is the current government’s social care workforce plan or Labour’s planned ‘fair pay deal’ for social care workers (a major policy commitment): these reforms cannot deliver real change until Councils have the long term funding needed for care providers of all stripes to deliver on them.
