Councils could resort to 'draconian cuts' to social care because of £51bn black hole

England’s councils are facing a £51.8bn funding black hole up until 2025 and believe they will be forced to make ‘draconian cuts’ to services such as social care.

The warning came from the County Councils Network (CCN), which represents councils and serves 26 million people, who council leaders now fear will be given the ‘bare minimum’ in local services if no extra funding arrives.

The £51bn black hole faced by councils over the next six years, follows analysis by PricewaterhouseCoopers LLP (PwC) which conducted an independent review of local government spending.

The ‘fragile’ nature of the social care system is revealed by the report which found spending on adult social care will rise by £6.1bn nationally by 2025, compared to a decade before.

After enduring nine years of cutbacks, council leaders argue the government must provide local authorities with a major funding injection in this year’s Spending Review over the next three years or give immediate emergency funding for next year, if the review is delayed because of Brexit uncertainty.

Councils ‘at limit of its elasticity’

“Local government is at the limit of its elasticity”, said Cllr Paul Carter, chairman of the CCN.

“Therefore, this Spending Review is crucial if we are to protect and enhance services.

“If government does not provide additional funding for councils over the medium term, many local authorities will resort to providing the bare minimum, with many vital services all but disappearing, particularly preventative services.

“Even these draconian cuts won’t be enough for many well-run councils to balance the books and it will leave our finances in disarray with many of us struggling to deliver even the basic level of local services.”

The funding gap for councils this year alone is £4.8bn and council leaders argue filling the funding hole only keeps services ‘standing still’ rather than improving them.

Council leaders have said rising demand for services and rising costs could contribute to councils needing more money because its annual council tax rises and efforts to use reserves and make services more efficient, will not plug the hole.

By 2025, county authorities will account for 47 per cent of all spending by local government on adult social care and will need to spend an extra £2.9bn annually, compared to 2015/16 on these services due to rising demand and costs.

The government is currently undertaking a review of council funding – called the ‘Fair funding review’ - which is planned for implementation early next year. The PwC report 'Independent Review of Local Government Spending Need and Funding' can be found on the CCN website.