New analysis reveals crippling cuts that will be forced on key frontline services including adult social care in London if the Government continues to back-track on their pledge to support councils in the wake of the Coronavirus crisis.
Local authorities are by far the largest funder of adult social care in England. They now face a £10bn Coronavirus black hole, forcing cuts across the board, indicating a £3.5bn cut to adult social care this year.
New analysis, based on 2019/20 budget estimates, local authorities’ Coronavirus-related costs and income losses, and adult social care budget data from the Kings Fund and Department for Health and Social Care shows:
- A £10bn Coronavirus black hole for local authorities would mean £3.5bn cut to social care: On 2020/21 budgets 21% cuts across local authority budgets would mean £3.5bn to adult social care as well cuts of £2bn to children’s social care and £700m to public health
- Equivalent of 225,000 adult social care places severely reduced or gone altogether: A £3.5bn cut in local authority adult social care spending is the equivalent of 176,000 long-term adult social care places for over 65s, and 23,000 short-term places
- 31,244 places would go in London alone.
- Other key services would be at risk of cuts if the Government fails to plug the funding gap, including libraries, children’s centres, leisure centres, public parks, road safety, road gritting and street lighting.
Julian Bell, Leader of Ealing Council, said,
“People in Ealing will find these figures terrifying. Everyone in this community knows the sacrifice and the loss we have endured through the coronavirus crisis, and we all know the enormous strain on our carers, and our friends and family who rely on their care. It is beyond belief that the government is not standing by them in their hour of need.
“Over 30,000 vulnerable people losing care across London would be a hammer blow. Ealing’s Labour Council will do whatever we can to shield those most in need from these cuts, but the reality is that if ministers don’t fulfil their promise and close the £10bn funding gap then frontline services will bear the brunt and our community will suffer.
“Ealing has already lost a staggering 64p in every pound since 2010 to central government cuts. Our communities cannot continue to bear the brunt of Tory austerity. If the government break their promises on funding, they’ll be betraying the vulnerable people they claim to be protecting and the incredible staff who are putting their lives on the line to support them.”
Shadow Communities and Local Government secretary Steve Reed MP said:
“Carers and our loved ones they care for are on the frontline of the fight against Coronavirus.
“Local authorities are the biggest funders of social care in England – so when the Government promised to stand behind councils through this crisis Labour supported them.
“But now Ministers are breaking that promise, leaving councils with a £10bn black hole forcing 21% cuts across the board. Unless the Government drops those plans the frontline heroes we’re cheering today will lose their jobs tomorrow and the equivalent of 225,000 frail and frightened older people and vulnerable adults will lose the support they rely on.
“That would be a catastrophe for social care, disastrous for those who lose support as providers are forced out of business, and would once again fail the very people putting their lives on the line to get us through this crisis”
“This government promised to do whatever it takes – if our loved ones see care taken away in their hour of need it will be devastating and unacceptable. The Government should change course, now.”
Notes to Editors
Local Authorities face a £10bn Coronavirus-led blackhole – a 21% reduction in budgets
Ministers promised to stand behind local authorities’ coronavirus-led budget reductions. On March 18th ministers provided assurances that they would make sure the government provides “whatever funding is needed for councils to get through this and come out the other side”, a pledge repeated by Robert Jenrick.
However, last week, Ministers rowed back on those plans, with Communities secretary Robert Jenrick telling MPs that councils should not “labour under a false impression” that all costs would be reimbursed, provoking widespread anger amongst local government leaders and MPs.
Councils estimate the funding gap from coronavirus to be around £13bn in 2020/21, made up from extra spending and loss of income.
The Government have so far funded just £3.2bn of this, leaving a gap of around £10 billion.
Councils do not have the ability to borrow to cover revenue spending, or to run deficit budgets by carrying overspends into subsequent years: councillors are subject to a legal duty to balance budgets. If they can’t find a way to finance their expenditure, then a section 114 notice is issued under the Local Government Act 1988 which bans all new expenditure and gives the council 21 days to produce an alternative budget that meets the criteria, and would involve making cuts to existing services. Several councils have already warned they are already just weeks away from issuing section 114 notices.
Councils in England have already seen government funding reduce by £16bn since 2010, leading many to rely on income streams that have now been severely affected by the economic shock caused by lockdown measures. The cross-party Local Government Association warned before the crisis that “the reality of £16 billion of funding reductions and increasing inflation are having a negative impact and residents are starting to see the consequences of these cuts”. While councils would make their own local decisions over how to balance their budgets, a decade of spending reductions mean that a further 21% reduction would fall almost entirely on statutory frontline services.
Saving £10bn by reducing all budget lines by 21%
Making a uniform reduction of 21% to all budgets would include significant cuts to vital services that are protecting people from covid-19, including:
- £3,525m from adult social care
- £1,912m from children’s social care
- £680m from public health
- £137m from homelessness
- £60m from crime, community safety, and CCTV
All figures based on the 2019/20 Revenue Account budgets: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/853005/RA_2019-20_data_by_LA_upd.xlsx
21% cuts to Adult Social Care would have a catastrophic impact on the sector
Based on the most recent figures available 2018/19 a 21% cut to adult social care is the equivalent of 200,000 losing care. This is likely to be an underestimate as social care requirements rise year on year. In 2020/21 a 21% cut would mean a £3.5bn reduction in funding to be delivered in the next ten months.
200,000 adults losing care
Kings Fund/DHSC Data reveals that in 2018/19:
- 841,850 adults receive publicly funded long-term social care in England, primarily in care / nursing homes or in their own homes. In addition, there were 223,605 episodes of short-term care provided
- A 21% reduction would mean the equivalent of 176,000 losing long-term care and 23,000 losing short-term care.
- In the North West that would mean the equivalent of 35,928 losing care, 31,244 London, and 31,059 in the South East
- A regional breakdown of those reductions is below.
|Region||Long Term Care recipients 2018/19|
|18 to 64||65 and over||Total||21% Reduction|
|Yorkshire and The Humber||31,305||56,055||87,360||18,345|
|East of England||31,600||59,440||91,040||19,118|
|Total for England||293,415||548,435||841,850||176,788|
|Region||Short Term Care recipients 2018/19|
|18 to 64||65 and over||Total||21% Reduction|
|Yorkshire and The Humber||2,890||20,010||22900||4809|
|East of England||5,230||23,785||29015||6093|
|Total for England||30,785||192,820||223605||23478|
To protect vital social care budgets for adults and children, which make up almost 55% of all council revenue spending, councils will have to make £10bn cuts in other areas
This required level of cuts is simply not plausible. Councils only could make £10bn cuts by, for example:
- end all work to support planning, building control, economic development, or business support (£1,250m)
- closing all libraries (£639m)
- closing all children’s centres (£409m)
- closing all leisure centres and sporting facilities (£345m)
- close all museums and end cultural support (£387m)
- close or stop all spending on parks (£659m)
- close all youth facilities (£339m)
- stop all support for homeless people (£656m)
- turning off all streetlights (£556m)
- no winter gritting (£136m)
- halt all transport planning and policy work (£192m)
- end all road safety measures, including school crossing (£149m)
- end all discretionary travel fares (£103m)
- reducing all emergency reserves to zero (£4,049m)
TOTAL = £9,869m