Portsmouth City Council Launches Consultation on 2% Council Tax Increase

Portsmouth City Council has launched a consultation with local residents on the Chancellor’s announcement that local authorities should fund adult social care costs by raising council tax by an additional 2%, reports Sarah Cheverton.

Chancellor George Osborne announced the ‘Social Care Precept’ in his Autumn Statement last week, allowing local authorities in England and Wales to increase council tax by up to 2% and spend the extra funds on adult social care. If all councils introduce the rise, the precept could raise £2 billion a year by 2019-20.

The measure is part of the Government’s reforms “to integrate health and social care by the end of the decade”, Mr Osborne said.

The Chancellor added, ““The health service cannot function effectively without good social care. The truth we need to confront is this: many local authorities are not going to be able to meet growing social care needs unless they have new sources of funding.”

However, both the Institute for Fiscal Studies and the Local Government Association warn that the Social Care Precept will benefit wealthy areas more than others, introducing a ‘postcode lottery’ of adult social care services.

Cllr Sharon Taylor, Deputy Chair of the Local Government Association, said “If all councils providing social care increased council tax by an extra 2 per cent each year they would raise £1.7 billion by 2020 with the average Band D taxpayer seeing an average rise of £96 in their bill. These council tax raising powers do not represent guaranteed money as not every council will be able to or will want to raise council tax in this way.

“Wealthier areas could benefit more because they collect more of their budgets through council tax and are less reliant on government funding. More deprived areas could then be hit doubly hard because they will be have to cope with deep government funding cuts while being unable to use council tax raising powers without dragging low-income families into financial difficulty.

“Elderly and vulnerable people now face an uncertain future where the dignified care and support they deserve, such as help getting dressed or getting out and about, will increasingly be at risk. We are also now on the fast-track towards a care home collapse which will leave more people left languishing in hospital beds. This is not only worse for our parents and grandparents but it is also bad for the taxpayer who will be left to pick up the bill.”

The proposed increase comes on top of a 2% rise that local authorities are already allowed to charge. Portsmouth City Council have already adopted a 2% rise in council tax and based their recent budget savings proposal on the increase. The Social Care Precept, if accepted by the local authority following the consultation, could therefore see a potential 4% total increase in council tax for local residents.

Leader of Portsmouth City Council, Donna Jones, announced the consultation on raising council tax to fund social care, commenting that the Chancellor’s Autumn Statement “reflects the national funding crisis in adult social care.”

 “In Portsmouth we have £2.4million less than we need, this year alone. This gap will get worse next year when the national living wage is introduced. This will push up care costs by around £1.5 million a year – about the same as the amount a 2% council tax rise would bring in.

 “The government had promised councils that it would meet the additional costs it imposes, but has now said councils need to tax local people to find that money.

 “In our original budget consultation earlier this year, we asked residents about council tax and the overwhelming majority said they’d be prepared to pay more to protect vital services. Our budget proposals are therefore based on a 2% council tax increase.

 “We now need to ask whether they would be willing to accept an additional 2% increase, specifically to pay for services for elderly and vulnerable residents, and to avoid another £1.2million of cuts.

 “Most homes in Portsmouth are in band A or B. In a band B property, an extra 2% increase would mean 35p a week. That’s less than the cost of a pint of milk or a chocolate bar, and it would help us to protect vital services that our elderly relatives, neighbours and friends rely on.”

Council tax is calculated according to the valuation of the property you live in and includes precepts for the Police and Crime Commissioner and the Combined Fire Authority.

Responding to the announcement in the Spending Review, Charity Director Caroline Abrahams from Age UK described the proposal as “most worrying”.

She continued,  “the extra money promised for social care is so deeply uncertain – depending as it does on councils applying a 2% precept on council tax – but in any case this supposed extra money for social care is not nearly enough. Even on the most optimistic reading of the measures announced today there is no taking account of the growth in need due to our ageing population and a million older people in England already have at least one unmet need for care. Expect these numbers to get considerably worse.

“If you read the detail behind the Chancellor’s speech you can see a new way of funding and organising social care being envisaged by 2020, based on a fully integrated approach with the NHS for the care of older people coming into and leaving hospital, and with councils using local funding sources to pay for the long term care of local residents who can’t afford to fund it for themselves. Managing the transition from where we are now to this new approach will be fraught with difficulty and we fear some very vulnerable older people could fall between the cracks and be badly let down along the way. The top priority must be to make sure this doesn’t happen.

“And more worrying still in the shorter term, with no reimbursement promised for the introduction of the new Living Wage into the care sector next April, we fear increasing numbers of private care homes will close their doors to council funded residents, further reducing choice in an already thread-bare market, ultimately making hospitals the place of last resort for people with nowhere else to go.

“The Chancellor rightly talked today about the importance of security, but regretfully for older people who need social care the next few years look worryingly uncertain.”

The Council’s consultation runs until 7th December and can be found here.

Photography by Sarah Cheverton.