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Council tax increase will not fill care funding gap

George Osborne's claim that a two per cent increase in council tax will raise £2bn has been rejected by the King's Fund think tank

9 December 2015

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Four leading health care bodies have warned the government that if the funding gap in the social care system is not filled, 'there is the potential for significant and adverse impacts'.

In a letter addressed to George Osborne, health secretary Jeremy hunt and communities and local government secretary Greg Clarke, the quartet ask what the government has done with the £6bn that was saved from postponing the funding element of the Cart Act (the so-called care cap) to 2020, instead of introducing it in 2016.

The letter signed by the Care Provider Alliance, the Care and Support Alliance, The Association of Directors of Adult Social Services and the NHS confederation, implores the government 'to explore every possible means' to alleviate the financial pressure on families and individuals, as well as the NHS and care service providers.

In the joint Autumn Statement and Spending Review 2015, Osborne gave local authorities the power to add two per cent to council tax exclusively to fund care provision, claiming that it could bring a further £2bn into social care if all councils implemented it.

This has since been refuted by the think tank, the King's Fund, which has said the tax is only likely to raise £800m.

The King's Fund also warns that this approach could lead to a greater disparity in the care services available between affluent and less affluent areas, as local councils in deprived areas will have a lower council tax base to tap into.

Osborne's unfunded commitment to a new national living wage has also recently come under fire from care service providers, who say the policy will cost care providers £382m in the next five years, as they divert funds away from services and into payroll demands.


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