Sector Responds to Publication of the Local Government Finance Settlement

Sector leaders and organisations have responded this weeks provisional local government finance settlement, which will provide £69 billion for councils across the country, a real-terms increase of 3.5% from 2024-25, which includes a new emergency £600 million Recovery Grant, and £3.7 billion of funding will be made available to social care authorities to support adult and children’s services through the Settlement.

This includes £880 million for the Social Care Grant – an increase of £200 million compared to what was indicated last month, taking its total to £5.9 billion – which will support councils to deliver care for adults and children in their communities, helping to reduce pressure on the NHS.

Melanie Williams, President of the Association of Directors of Adult Social Services, said: “While this additional funding is welcome, there remains a funding gap of over £1bn for adult social care to even standstill next year, which means councils won’t be able to fully meet people’s care and support needs. This means that fewer people will be able to draw on care and support to help them stay independent and well, such as transport to go shopping, a regular cooked meal or support for family carers.”

“Limiting the number of people who can access adult social care creates a vicious cycle; too many people reach crisis point and end up in hospital unnecessarily because they aren’t receiving low level care at home, and they can’t leave hospital because there isn’t enough support to return home safely.”

“To get people home from hospital quicker and prevent them from needing to go there in the first place, the Government must commit to a long-term, fully funded plan for social care, to make care at home and in the community the default option for everybody.”

Sam Monaghan, Chief Executive said: “The Government has acknowledged the need to increase funding for adult social care through the Local Government Finance Settlement, and this is a move in the right direction.”

“ However, the small amount of additional funding provided is not enough to protect adult social care services from the impact of the increased employer national insurance costs, nor cover the existing gap that remains between what it costs to deliver care, and what local authorities pay. These cost pressures present increased risk for the delivery of essential services for older people.”

“We want to work in partnership with the government and local authorities to solve the issues we are all facing, but this requires the government to recognise the adult social sector for the public service and valuable infrastructure that it is.”

“We urge Ministers and officials in the Treasury to meet with sector representatives and provide protection for adult social care, otherwise Government ambitions for growth and to address problems in the NHS will be in jeopardy.”

Professor Vic Rayner OBE Chair of the Care Provider Alliance says:
“Alarm bells continue to sound across adult social care in the face of the draft local government settlement. The recent survey by CPA demonstrated the massive cost of the Budget to social care services up and down the country.
“The cumulative cost of the changes in the Budget has been identified as 2.8bn, yet the uplift identified in today’s draft settlement represents a mere 10% of the additional funding needed.”

“The impact on people who need care and support, the care workforce and those delivering services is enormous, and it is imperative that the government pays heed to the very real risks that pursuing this path represents.”

“Government led changes to the costs of delivering public services like social care must be met in full to ensure the provision of a care service fit for the future, as well as one that meets the needs of communities right now.”

Nuffield Trust Deputy Director of Policy Natasha Curry said: “The new grant money for councils announced today is welcome. It will go some way to easing what will be a very tough year for local authorities and social care. ”

“It’s also good to see first steps towards funding reform and allocating money more fairly. We have long warned that the fact that poorer councils find it harder to raise taxes has caused unacceptable inequalities in how much money is available for care.”

“However, even if it all went to adult social care, the extra social care grant funding of £880m and national insurance contributions (NICs) funding of £515m fall well short of the £2bn of additional cost pressures we estimate from the National Living Wage and employer NICs. This figure relates to the share of adult social care paid for by councils. Even the total real terms increase in council spending from all sources is barely enough to just cover these costs.” 

“This will mean tough choices for local authorities between increasing fees to social care providers to recognise their costs and spending on other services. It will leave little to meet the gap we know social care faces from rising demand, tackle rising waiting lists or to improve the many other overstretched services for which local authorities are responsible. The government should monitor provider stability closely and be ready to act.” 

“While today’s funding news will bring short-term cost relief in some areas, ultimately care provision remains on a knife-edge for many councils and care providers. With the Health and Social Care Secretary also reaffirming today that action on a long-term plan for social care reform will start in the new year, the sector will be still starting that journey from a difficult place and there will be no time to waste.” 

Professor Martin Green OBE, Chief Executive of Care England commented:
“Yesterday’s (December 18) Local Government Settlement highlights the government’s continued failure to prioritise adult social care.”

While the announcement of additional £880 million funding is welcome, it falls far short of addressing the scale of the crisis. There is a real risk that local authorities, under immense financial pressure, will be left with no choice to divert funds they may have otherwise allocated to social care to other areas.”

“This is not the fault of local authorities who will be forced to make up to £1.4bn of savings in 2025-26 from Adult Social Care Budgets according to the ADASS, but rather a direct consequence of the government’s chronic underfunding of both the adult social care sector and local government budgets.”