Funding settlement for social care ‘not enough’ to cover living wage rise, says LGA

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The Local Government Association (LGA) has welcomed “desperately needed” government funding for social care, but warned that it won’t be enough to cover the increase in the National Living Wage from April.

Announcing the local government finance settlement last week, Robert Jenrick, the Secretary of State for the Ministry of Housing, Communities and Local Government, confirmed an additional £1.5 billion for social care.

This comprises a £1 billion grant for adult and children’s social care. But local authorities responsible for adult social care will be required to make use of the social care precept, which allows local authorities to increase their share of council tax by up to an extra 2%, to raise the additional £500 million.

The LGA, the national membership body for local authorities, said it was pleased the government has acted on its call for new money for councils to meet rising pressures they face, but raised concerns about its failure to directly fund rises of over 6% in the national minimum and living wages.

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Cllr James Jamieson, chairman of the LGA, said: “Extra funding for social care this year, council-tax raising powers and the continuation of key grants are good news and will ensure councils can help older and disabled people to live more independently, support our most vulnerable young people and continue to deliver vital services.

“We are disappointed that the Government has not used the final settlement to provide the £220 million needed to pay for the faster than expected rise in the National Living Wage (NLW) from April.

“Councils fully support the NLW but this unforeseen new cost pressure needs to be funded to avoid the fragile care provider market being further destabilised. We also urge the Government to publish the public health settlement as soon as possible so councils can properly plan how to provide vital services which help people stay healthy, while reducing the strain on the NHS and social care.”

Increases in the National Living Wage (NLW) above inflation have led to a rise in failed social care businesses, a reduction in care quality and insecure working conditions across the sector, according to new data.

The Low Pay Commission found that ‘business deaths’ in social care have increased “significantly” in the two years following the introduction of the NLW in April 2016, but that deaths in other low-paying industries, such as retail and hospitality, have been “reasonably flat” over the period.

This April, the NLW is set to rise by 6.2% to £8.72 in what the government says is “the biggest cash increase ever”.

Tags : finance settlementFundingLocal Government Association
Sarah Clarke

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