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The UK government is planning to pledge £500mn in extra funding towards social care in the next financial year after a string of warnings about the financial pressures facing local authorities in England.
Government and local authority sources said the additional funds, which will mostly benefit county and unitary councils responsible for social care delivery, will be announced on Tuesday afternoon.
This week more than 40 Tory MPs threatened to vote against the £64bn local government financial settlement for 2024-25, warning of looming insolvencies, reduced services and higher taxes. The government had been resisting calls to improve its offer.
A Whitehall official credited Michael Gove, the secretary of state for levelling up, housing and communities, with extracting the extra funding, arguing he had “made the case forcefully to No 10 and the Treasury that councils need a lifeline”.
The additional money will “help well-managed councils continue to deliver vital frontline services for residents”, the official insisted.
But the additional £500mn will only go some way towards plugging the £4bn deficit facing councils over the next two years forecast by the Local Government Association representative body.
“I would say this is more than a drop in the ocean and it will stave off some of the worst service reductions,” said a local government official who was not authorised to comment publicly. “But the bottom line is it is not enough to eradicate council deficits,” they added.
In December, Gove announced a £64bn proposed settlement for local authorities in the 2024-25 financial year, to be finalised next month. This represented an annual increase of 6.5 per cent with an additional £1bn in grants for social care.
The offer was described at the time by the County Council Network, representing the largest local authorities in England, as “bitterly disappointing” in light of soaring costs and rising demand for services.
A record number of councils have been forced in recent years to issue “section 114” orders declaring their inability to meet a legal requirement to balance the books.
The CCN said that without a greatly improved settlement, councils would be forced to implement the most severe reductions to services and levy higher council taxes as a result.
The additional funds will benefit just under half of England’s 317 councils, which are responsible for social care. A smaller sum of around £40mn has been earmarked, local government sources said, to placate town and district councils.
Spread across the county council and unitary council network according to a relative needs formula, the funds will on average add between £2mn-£3mn per council, according to Jack Shaw, an expert in local government and fellow at the Bennett Institute think-tank, potentially reducing some of the most severe cuts to frontline services.
“All councils are going to be cutting some social care. Southend for example is cutting dementia care support. This may just mean they have to make slightly fewer savings,” said Shaw.
