Pensions  

IFS warns councils have cut on social care

IFS warns councils have cut on social care

The estimated amount spent on social care for adults aged over 65 by local councils has fallen by 18 per cent in 10 years despite ever more people needing support, according to the latest figures.

According to the Institute for Fiscal Studies’ first annual report on local government finance, there was a 20 per cent increase in the number of adults aged 65 or over between 2009-10 and now but the amount spent on social care by councils has fallen by a fifth in the period.

Councils have faced cuts to funding and many have reallocated funds to areas such as care for children and severely disabled younger adults, according to the IFS.

The IFS warned social care for adults could potentially see further cut backs as councils are becoming increasingly reliant on local tax revenues to fund such services.

It is expected spending on adult social care will be 7 per cent lower per resident in 2019-20 than 10 years ago but spending on children’s social care will be 2 per cent higher.

The report found half of councils’ revenues for services other than education now come from council tax, and another 30 per cent from business rates, up from just over a third and nothing, respectively, in 2009-10. 

Council tax bills have risen 8 per cent above inflation over the past four years, and are 4 per cent higher in real-terms than in 2010-11.

The IFS warned the increasing proportion of councils’ spending that goes to services which only a relatively small fraction of the population benefit directly from, like social care, could affect the willingness of taxpayers to pay the council tax increases needed to meet the rising costs. 

Tom Harris, research economist at the IFS, said: “Looking at the data, it’s clear that councils have adapted to a decade of cuts by focusing their spending on their most needy residents and meeting their statutory duties. 

“Spending on adults’ and children’s social care accounts for 57 per cent of their non-education budgets, and a further 7 per cent goes on public health services.

“This has meant big cuts to a whole raft of other services, and looking ahead it may be difficult to squeeze much more money from these if councils find their budgets under further pressure. 

“Indeed, in councils that have had to make bigger-than-average cuts over the last decade, it’s bigger cuts to social care that have largely allowed them to do this.”

Earlier this week (November 11), the IFS warned that councils will need billions in extra funding just to maintain social care services at current levels, which many people have argued are not sufficient.

The IFS calculated with council tax rising in line with inflation (2 per cent a year), councils will need an extra £4bn a year to maintain current levels of social care and stop further cut backs spent on other services like children’s social care and housing.

The IFS estimated this shortfall would rise to £18bn a year by the mid-2030s.