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Adult social care funding: a local or national responsibility?

27 March 2018

This new Institute for Fiscal Studies (IFS) report argues that ongoing reforms to local government finance risk a growing funding gap for adult social care and conflict with efforts to provide consistent and high-quality care services across the country.

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The government plans to abolish general grant funding for councils from 2020, meaning councils will depend on council tax and business rates for the vast majority of their general funding. But revenues from these taxes are unlikely to keep pace with the rising costs of adult social care services, leaving councils with increasingly tough choices about which services to prioritise.

Even if council tax revenues increased by 4.5% a year – more than double the rate of projected inflation – adult social care spending could amount to half of all revenue from local taxes by 2035. That is up from just 30% today.

In 1 in 10 councils, the share of the population aged 75 and over is projected to grow by 6.0 percentage points or more over the next 20 years. But in another 1 in 10 councils, it is due to increase by just 1.7 percentage points or less. This could lead to, either a postcode lottery for care services or, reduced service delivery in areas such as children’s services, public health services, housing services and bin collection.