Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 15
15
Accepted
Paragraph: 74
We recognise the benefits of raising a proportion of funding for adult social care locally.
Recommendation
We recognise the benefits of raising a proportion of funding for adult social care locally. As we have argued in previous reports, we support greater fiscal devolution. In finding the right balance of funding sources for adult social care, however, we are concerned by the increasing reliance on locally raised tax revenue as currently constituted. In our previous report on local authority financial sustainability and the section 114 regime, we recommended a variety of ways in which the mix of funding to local authorities could be improved, including: resetting business rates, implementing the Fair Funding Review, 75% business rates retention with additional funding put towards an equalisation grant, and revaluing council tax. For this inquiry, we heard that the amount that areas can raise through council tax is not related to need: often the places with the lowest income from council tax have a higher proportion of adults who are eligible for state support for their care. We also recognise that the decision to raise social care precept will become a harder sell for councils when residents have already seen their National Insurance Contributions increase to pay for health and social care. In deciding how much additional funding to provide from the centre for adult social care, the Government must proceed with the aim of rebalancing the sources of funding so there is not such a reliance on council tax.
Government response summary AI-generated
The government states that overall funding for health and social care will be maintained at the same level as if the Levy was in place, and that savings from delaying implementation of charging reform will be distributed via the existing Social Care Grant that supports local authorities to meet the current pressures in social care.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
74
Government Response
Accepted
HM Government · verbatim extract
Accepted
The proposed Health and Social Care Levy has been repealed since the publication of the Committee’s report. Instead, the government is making available more funding for adult social care through general taxation and increased Council Tax flexibilities. As set out in response to Conclusion 3, the Autumn Statement made available up to £7.5 billion of additional funding over two years to support adult social care and discharge - with up to £2.8 billion available in 2023–24 and up to £4.7 billion in 2024–25. This historic funding boost is on top of the funding originally announced at Spending Review 2021 and will put the adult social care system on a stronger financial footing for the long-term, helping local authorities to address waiting lists, low fee rates, and workforce pressures in the sector. This includes £1 billion of new grant funding in 2023–24 and £1.7 billion in 2024–25 and further flexibility for local authorities on Council Tax. This includes £600 million in 2023–24 and £1 billion in 2024–25 to support discharge from hospital into adult social care, including fast access to domiciliary care and home-based reablement. Reducing delayed discharges frees up hospital capacity and ensures patients can be discharged home or to other appropriate settings, with the right care and support to help their recovery. Addressing this issue requires a coordinated approach across health and social care systems locally. Funding will be split between local authorities and NHS integrated care boards (ICBs) and pooled through the Better Care Fund (BCF) to deliver an integrated plan to reducing delayed discharges and improving collaboration and information sharing across health and social care services. The government is also taking specific action to improve access to adult social care by expanding capacity in the care sector through increased funding, workforce recruitment assistance and support for volunteers. The new grant funding announced at the Autumn Statement also includes the creation of the Market Sustainability and Improvement Fund (MSIF), where an additional £400 million of ringfenced funding for adult social care will be made available to local authorities in 2023–24, and £683m in 2024–25. This will be combined with £162 million of Fair Cost of Care funding in both years, to total £1.4 billion (£562 million in 2023–24 and £845m in 2024–25). Local authorities will have flexibility to use this funding to drive tangible improvements to adult social care across several areas; to address discharge delays, social care waiting times, low fee rates, workforce pressures, and to promote technological innovation in the sector. We published more detail on the purpose and high-level grant conditions for MSIF in an explanatory note1 alongside the final local government finance settlement (LGFS) on 6 February 2023.
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