posted on 26 March 2018, updated on 26 March 2018
The Institute for Fiscal Studies (IFS) has warned that council tax and business rates in England will not keep pace with a growing social care need – and the funding gap is likely to significantly increase.
Even if council tax revenues increased by 4.5% a year, adult social care spending is likely to amount to half of all revenue from local taxes by 2035, the IFS has predicted.
There is “no easy way to square the circle”, the think-tank recognised in its report
Adult Social Care Funding: A Local or National Responsibility?, “without backtracking on reforms to local government finance and reintroducing general grant funding”.
Grant funding from government is planned to end by 2020, and councils will be expected to rely on council tax and business rates for most of their revenue.
If councils meet their social care costs through local tax revenues “the amount left over for other services – including children’s services, housing, economic development, bin collection – would fall in real terms (by 0.3% a year, on average)”, the IFS warned in the report, funded by the Health Foundation charity.
One in 10 councils are to see their share of the population aged 75 and over increase by six percentage points or more over the next 20 years, the IFS noted.