The provisional local government finance settlement: England, 2021 to 2022 sets out a £300 million increase in grant funding for social care services.
Analysts from the Institute of Fiscal Studies say that the social care settlement represents “more than enough funding to meet [middle-ground] funding needs next year”, despite some persistence in higher costs for adult social care and public health services, and lower income from sales, fees and charges and commercial activities, and local tax revenues.
The social care settlement for 2020-21 has been informed by extra COVID-related funding, as well as core funding received by councils during the year. IFS analysts continue: “Indeed, the funding plans could help councils start to address longer-run shortfalls in social care funding.”
However, long-term, councils face chronic ill-health and safeguarding issues, partly as a consequence of COVID-19. which would come on top of pre-existing demand and cost pressures. “This means it is highly likely that a funding gap will open up in future years, unless there are continued large increases in council tax and/or additional funding is allocated or devolved to councils.”
The adult social care system review may also have “major implications” for councils’ spending responsibilities and needs or revenues in the years ahead.
The longer-term financial outlook for local government therefore remains highly uncertain – and challenging.
President of the Association of Directors of Adult Social Services (ADASS) James Bullion said: “We were hoping for a settlement that would enable us to stabilise care and support services for millions of older and disabled people and family carers. This settlement is a poor outcome for social care, following a difficult year. 2021 must the year that the Government puts social care at the heart of its post-Covid-19 recovery plan. Investing in social care will benefit us all.”