Local authorities delivering social care facing £2.1bn black hole
Councils with social care responsibilities in England are facing a £2.1bn funding shortfall next year, according to research from UNISON.
The public sector workers’ union said the black hole local authorities face in 2022-23 will lead to “huge service and staff cuts”, unless central government steps in to increase funding.
On average, authorities providing adults’ and children’s social care – typically county councils and unitary authorities, including London and metropolitan boroughs – face a £14.3m funding deficit for 2022-23. The research shows this varies across the country with some of these top-tier councils having more than four times that gap, though the figures are not adjusted for size of budget or population.
Top-tier councils in the East of England face the largest shortfall on average, £18.7m, followed by those in the South East, £17.9m, and those in the West Midlands, £16.1m.
Local authorities in the North East face the smallest shortfall on average, £7m, then those in Greater London, £11.6m, and those in the North West, £13.8m.
The 24 county councils in England also face higher shortfalls on average compared to top-tier councils overall – £25.1m per local authority – but they typically have bigger budgets than unitaries.
‘No other option but to cut services’
The Association for Directors of Children’s Services (ADCS) said councils were being forced to cut children’s social care services because of increasing shortfalls due to reduced central government funding.
“The impact of rising council deficits on children’s services cannot be overstated,” said ADCS vice president Steve Crocker.
“Councils have worked hard to manage demand and protect the most vulnerable, but they have been left with no other option but to perversely cut the very services that enable us to intervene early before crisis hits.
“This is a false economy and is storing up huge financial and human costs for the future. Now more than ever we need to work with children and families who are at risk of poor outcomes at the earliest possible stage, but only with adequate long-term national investment can we continue to provide this vital support.”
What has happened to council budgets?
Local government ‘spending power’ – the amount the government calculates councils have available to spend – fell from 2010-11 to 2016-17 in real terms, chiefly due to central government cuts, before stabilising thereafter up to 2020-21, according to the National Audit Office.
In its one-year spending review last year, the government said that spending power was due to rise by 4.5% in cash terms in 2021-22 though this was reliant on councils with social care responsibilities increasing council tax by 5%. Taking into account inflation, this would be a rise of 2% to 3%.
However, this does not take into account rising levels of need, which councils have reported over the past decade in social care, due to demographic pressures in adults’ services and increases in all levels of statutory intervention in children’s services. Also, it does account for the additional costs, and reduced income, for councils due to Covid, which government has funded separately though council leaders have claimed this has not been sufficient.
The Association for Directors of Adult Social Care Services said the findings echoed its own research published last month. This found that councils were making savings of £601m to adults’ social services in 2021-22 but also that they were much less confident, on average, on delivering planned savings in 2022-23 than in the current financial year.
A County Councils Network (CCN) spokesperson said its own research showed rising costs of services such as adults’ and children’s social care were also driving local authorities’ deficits.
“Yearly increases in people requiring care, and the rising costs of delivering those services, will mean that CCN’s member councils will be required to spend an additional £3.2bn annually on adult social care by 2030 compared to 2020 – a 40% rise,” a CCN spokesperson said.
“The study shows those councils will be required to spend an additional £1.1bn annually on children’s social care by the end of the decade compared to 2020, which is a 29% increase.
“To meet these rising costs and spending requirements, the government must provide an uplift in funding alongside a sustainable funding model for councils in this year’s Spending Review, moving away from short-term and ad-hoc financing of local government.”
Councils plan service cuts
According to UNISON’s data, Hampshire County Council faces the largest shortfall of all, £65.9m, while Leeds City Council’s is £65.7m and Kent County Council’s is £64.6m.
Hampshire is consulting residents on how to balance its budget for 2022 to 2024, including plans to make cuts such as reducing numbers of health visitors and school nurses that would mean fewer face-to-face visits and reviews with children.
The School and Public Health Nurses Association and Institute of Health Visiting warned that these cuts could have a knock-on effect for children’s social care.
But Hampshire said it would continue to deliver care for vulnerable children and adults, partly funded by an increase of 4.99% in council tax for the current financial year – of which 3% would be specifically for adults’ social care through the specific precept for that service.
“This recommended increase would generate an extra £35m towards delivering essential county council services in the next financial year, especially in the care of the vulnerable, and would mean that Hampshire is still likely to still have one of the lowest council tax precepts of all counties in England,” a spokesperson for the council said.
Leeds said the increasing cost of looking after vulnerable residents was one of the main reasons why it faces a £65.7m shortfall in 2022/23 and said it was becoming difficult to protect funding for social care.
“We have prioritised services to our most vulnerable residents, including children’s services and adult social care, however, this is becoming more challenging,” a council spokesperson said.
“The current financial picture is complex and we are currently undertaking careful planning for the next financial year, including our annual budget consultation with local residents.”
Kent’s corporate finance director Zena Cooke told KentOnline last month that that the challenges of dealing with the coronavirus pandemic were a major contributor to the county council’s funding shortfall and warned that the impact of “depressed activity” in adults’ and children’s social care “is now beginning to come through in terms of the complexity of care that is required and the cost of that care”.
The south coast authority has also stopped accepting unaccompanied asylum-seeking children (UASC) due to continued high caseloads.
Elsewhere, Norfolk County Council, which faces a £47.9m deficit, discussed plans last month to make £17.7m of savings from adult social services and £8.7m from children’s services, according to the Eastern Daily Press.
Devon County Council, which faced a £46.3m shortfall, reduced the monetary value of 655 care packages for working-age adults and nearly 2,000 care packages for over-65s between March and September last year, according to a report in the Guardian.
Cornwall council, which faces a £26.4m deficit in 2022-23, is set to cut £10.34m from its adult social care budget in the current financial year, according to a report in Cornish Stuff last month.
Birmingham City Council, which faces a £38.5m shortfall by 2022-23, will cut adult social care funding by £7.8m by April 2025, according to a report in the Birmingham Mail.
Slough Borough Council, which faces a £33.2m deficit, declared its budget unsustainable last month, with cuts to non-statutory children’s and adults’ services a possibility.
Croydon council, which faces a £38.3m shortfall, warned last week it could lay off agency social workers that work with UASC as caseloads remain high in the area, which is home to the Home Office’s Lunar House asylum intake unit.
Croydon stopped all “non-essential” spending from November 2020 to March 2021 due to financial pressures.