6.5% Increase In Council Funding Not Enough Sector Says

A 6.5% increase in funding for local councils in England is unlikely to quell fears of a wave of de facto town hall bankruptcies, and will result in care home closures sector leaders fear.

Mr Gove is expected to announce a provisional package worth more than £64bn with extra support for social care and housing, according to multiple government officials, but it will fall short of the help demanded by councils.

Mr Gove earlier this month admitted he was “concerned” at warnings from the Local Government Association this month that one in five councils were heading for the rocks this or next year as a result of lack of government funding

In response to the provisional Local Government Finance Settlement of 6.5 per cent for 2024/25, Professor Martin Green OBE, Chief Executive of Care England, said:

“The writing is on the wall for Local Government. Without a paradigm shift in the Government strategy for social care, many care services will close. With inflation at 6.7 per cent in September of this year and with a National Living Wage increase of 9.8 per cent in April next year, a 6.5 per cent uplift is a long way from what the sector requires to even stand still.”

“Put simply, current Government investment in the sector is not enough. The Local Government Association analysis shows funding gaps of £2.4 billion in 2023/24 and £1.6 billion in 2024/25 who also report 1 in 5 councils now fear issuing a Section 114 in the next year. This is a 100% increase in the last twelve months. Care providers are operating on unsustainable margins having already absorbed inflationary pressures over multiple years due to insufficient Government funding but we cannot continue to be called upon to fill the funding gap left by Government.”