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The Ministry for Housing Communities and Local Government (MHCLG) has announced the provisional local government finance settlement for 2021/22, which lays out the annual determination of funding to local government from central government.

The proposals relate to England only and the final 2021/2022 settlement is expected to be presented to the House of Commons for approval in late January or early February 2021.

MHCLG notes that the provisional settlement has been drawn up during the unprecedented COVID-19 pandemic, which has brought about unique pressures on local authorities.

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The government’s primary aim during this difficult period has been to continue to support councils in dealing with the immediate impacts of the pandemic, to promote recovery and renewal at local level, and support and maintain critical mainstream services.

To help councils meet COVID-19 costs and increasing social care pressures, the provisional document says that core spending on local services has the potential to increase by £2.2 billion in 2021/2022, equating to an increase of 4.5 percent.

However, the Local Government Association (LGA) highlights that over 85 percent of the potential core funding increase for this period is dependent on councils increasing council tax by up to 5 percent in 2021/2022. This means local authorities have to weigh up whether to increase brills to bring in vital funding to protect services at a time where people might be struggling more financially due to the COVID-19 pandemic.

Importantly, the provisional settlement also discusses adult social care funding provision.

For 2021/22, the government is proposing to make available an additional £1 billion for social care, which includes a £300 million boost to the Social Care Grant to a total of £1.71 billion. Local authorities with adult social care responsibilities will also be able to raise council tax by an additional three percent to help to support the most vulnerable, the provisional settlement recommends.

The government is also proposing to roll-forward the 2020-21 Social Care Grant of £1.41 billion and the 2020-21 improved Better Care Fund of £2.1 billion.

The improved Better Care Fund is paid as a direct grant to local authorities, which they can spend on meeting adult social care needs, reducing pressure on the NHS, and ensuring that the local social care provider market is supported.

Additionally, the government proposes that the Social Care Grant will not be ringfenced and conditions on reporting requirements will not be attached. This would mean it is up to local authorities to determine how much of the grant should be spent on adult social care and how much should be spent on children’s social care.

However, the LGA says that council tax raises have never been the solution for the long-term pressures faced by councils, particularly in social care which is “desperately in need of reform”. It says that council tax raises increases different amounts of money in different parts of the country, unrelated to social care needs.

Echoing the LGA’s concerns, James Bullion, ADASS President, has also expressed concerns surrounding the provisional local government settlement, particularly regarding uncertainty for a long-term care solution. He said: “We were hoping for a settlement that would enable us to stabilise care and support services for millions of older and disabled people and family carers. We have repeatedly asked for certainty so that we can ensure that care providers remain in business, staff are paid a national care wage, carers get the support and breaks they need and we ensure that we can support more people to remain at home.

“This settlement is a poor outcome for social care, following a difficult year.  2021 must the year that the Government puts social care at the heart of its post-Covid-19 recovery plan. Investing in social care will benefit us all.”

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