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Social Care News - More Improvements Towards Social Care - Tax increase to support social care.

Posted on 2/08/2018 by David Burgess

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LGA proposes tax increase to support social care

A 1p increase in the basic income tax rate could generate an additional £4.4bn to help take the pressure off adult social care in the UK

The Local Government Authority (LGA) says the rise in tax, and also in national insurance, could be used to address “decades of failures” which have left adult social care without a sustainable model of funding. 

A government Green Paper on adult social care has been delayed until after the summer recess, prompting the LGA to launch its own eight-week consultation, starting on Tuesday. 

The authority reports that since 2010 councils have faced a £6bn funding shortfall, and are estimated to face a gap of £3.5bn from the funding needed to maintain the existing standards of care by 2025. 

It claims that underfunding for councils, rising demand and cost of care have pushed the care system to “breaking point” noting that short-term cash injections have been insufficient, leaving many care providers to close operations. 

The LGA’s biggest-ever consultation offers options to improve the system and radicalise its funding, calling for views from a wide range of experts, users of care and health services, carers, and others unfamiliar with the system. 

Other options it suggested included increasing national insurance by 1p to raise £10.4bn in 2024/25, charging over-40s a social care premium – which could raise £1bn at the cost of £33.40 per person – raising money by means testing universal benefits – “such as winter fuel allowance and free TV licences” – and allowing councils to increase council tax by 1%. 

In June, the then-secretary of state for the Department of Health and Social Care (DHSC), Jeremy Hunt, said the Green Paper’s postponement would allow the DHSC to integrate “plans for social care with the new NHS plan”. 

He noted that NHS and social care provision were connected, as it “is not possible to have a plan for one sector without the other”. 

A DHSC spokesperson said £9.4bn had been provided to local authorities for social care. They explained, “Our Green Paper, due in the autumn, will set out our plans to reform the social care system to ensure it’s sustainable for the future.” 

However, councillor Izzi Seccombe, chairman of the LGA’s Community Wellbeing Board, said that work on a solution to adult social care funding has been “kicked into the long grass by successive governments for the past two decades.” 

“It has created a deeply uncertain and worrying future outlook for people who use adult social care services now and the growing number of people who will need them in the future.” 

Seccombe stressed the importance of finding a way to fund adult social care “for the long-term”, adding that the Green Paper will stimulate a nationwide public debate on the matter.

Source: Economia.icaew