The government has announced an extra £500 million set to be earmarked to enable councils to provide crucial social care services.
In total councils across England will receive a £600 million support package, in addition to funding outlined at the provisional settlement, to help them deliver key services, the Levelling Up Secretary Michael Gove has announced.
The government said that the support package comes following “significant progress” on its economic priorities of halving inflation, growing the economy and reducing debt.
The support package will primarily see an additional £500 million added to the Social Care Grant to bolster social care budgets, a key concern raised by councils.
All councils will also see an increase in Core Spending Power of at least 4% through the Funding Guarantee before any local choices on council tax, efficiencies or reserves – an increase from the 3% announced at the provisional settlement. The Government’s manifesto commits to continuing to protect local taxpayers from excessive council tax increases. The proposed referendum principles strikes a fair balance. Local authorities must be mindful of cost-of-living pressures when taking any decisions relating to council tax.
This funding builds on the £64 billion package already announced at the provisional Local Government Finance Settlement for 2024-25, and has been welcomed by leading local government organisations including the Local Government Association, County Councils Network and District Councils Network.
Michael Gove said:
“We have listened to councils across England about the pressures they’re facing and have always stood ready to help those in need.”
“This additional £600 million support package illustrates our commitment to local government. We are in their corner, and we support the incredible and often unsung work they do day-to-day to support people across the country.”
Sam Monaghan, Chief Executive, MHA
“With thousands of people waiting for care services, it is critical that the £600m in additional funding which the Government is providing to local authorities reaches adult social care services as soon as possible.”
“This short-term injection of cash for the sector will provide a good news headline for Government ahead of an anticipated General Election later this year. However, what the sector desperately needs is more sustainable and long-term solutions.”
“The funding won’t help care providers to resolve the continued pressures they are facing, which include eye-wateringly high utility bills and a workforce crisis.”
“To meet the care needs of the population – both now and in the future – while providing greater certainty to the sector, the Government must show it is committed to long-term funding. The Spring Budget offers it a great opportunity to put these firmer plans in place.”
Minister for Local Government Simon Hoare added:
“This injection of funding will help ensure services which people rely on can continue – and demonstrates how important we view local government. We have listened to various organisations and considered their views seriously and I’m grateful to those who reached out to me.”
“The funding offers something for all of our hard-working councils, with additional funding for social care as well as help for rural authorities to deliver essential services.”
“In light of the exceptional circumstances, the Treasury will be providing £500m with further details set out at the upcoming Budget whilst details on the distribution of this funding will be included in the final Local Government Finance Settlement early next month.”
Councillor Shaun Davies, Chair of the Local Government Association, said:
The LGA welcomes that the Government has acted on the concerns we have raised and recognised the severe financial pressures facing councils, particularly in providing services to the most vulnerable children and adults through social care services and delivering core front-line services to communities.
We will continue to work with Government to achieve a sustainable long term funding settlement and updated distribution mechanisms, as well as legislative reform where needed, so that local government can play its full part in delivering inclusive prosperity and growth through investment to support people, places, and the planet.
Councillor Tim Oliver, Chairman of the County Councils, said:
We strongly welcome the government listening to our concerns, and today’s announcement of an additional £0.5 billion will go some way to easing the pressures and in particular addressing the escalating demand and costs of delivering social care and home to school transport. Whilst this extra funding will undoubtedly help us protect valued frontline services, councils, of course, still face difficult decisions when setting their budgets for 2024/25.
Looking further ahead, reform of local government finance and the way in which we are expected to provide services is imperative. Councils require a long-term financial settlement to enable us to plan for, and meet, the demand from our growing elderly populations and the more complex needs of residents requiring social care. This must be coupled with a comprehensive reform programme to bring in line the funding envelope available to enable us to deliver effectively our statutory responsibilities.