Average council tax could rise by up to £100, to more than £2,000 for households in zone D, from April after chancellor Jeremy Hunt confirmed in the Autumn Statement that the cap on how much local authorities could raise rates would be relaxed. High council tax bills are expected to co-fund a planned cash injection into adult social care budgets of up to £7.5bn over the next two years, an announcement hailed as a government acknowledgment of the crisis gripping the sector, but offers it is only a short-term respite. Local authorities with social care responsibilities will have the flexibility to increase council tax by up to 5% (including the 2% social welfare levy), while others can impose increases of up to 3%. The current limits are 3% and 2% respectively. Councils will face tough decisions about whether to take advantage of the new rules to provide some relief for their battered balance sheets, knowing that increased bills will mean more pain for hard-pressed families during a cost-of-living crisis. However, even if three-quarters of local authorities in England increased council tax by the maximum allowed, it would reduce the local government sector’s funding shortfall – estimated at £9bn by 2025-26 – by just £2bn .£, according to the consulting firm Grant Thornton. The social care funding Hunt announced on Thursday was significantly less than the £7bn a year increase he called for two years ago when he was chairman of the Commons health and social care committee. It is unclear how much it will substantially reduce the industry’s deep staffing and capacity problems. Mike Padgham, chairman of the Independent Care Group, which represents care home providers, said: “The extra money is welcome, but will it increase staff pay to deal with the 165,000 vacancies in social care staff? No. Will it help us break through to 1.6 million? [people] who can’t care? Very little, if any.” There was relief from councils that the introduction of a flagship Tory policy to cap lifetime care charges at £86,000, which will start next year, had been delayed until October 2025, amid warnings that fragile local care services they needed more time to prepare for the changes. But the delay will disrupt the plans of thousands of people who rely on promised support with potentially devastating care costs. The Tory chairman of the Commons’ health and social care committee, Steve Bryan, said the delay meant “more people face the very real prospect of bills being crippled”. Jennifer Dixon, chief executive of the Health Foundation, said it was the latest repeal of a measure originally proposed a decade ago. “The government has chosen to prolong a major public policy failure that is leaving older and disabled people without the care they need and many facing devastating costs,” he said. Overall, with the chancellor keeping local government spending next year at current levels, there has been little relief for councils struggling with multi-billion pound windfalls from rising wage and energy bills, or for users of local government services who face further cuts. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Local Government Association chairman James Jamieson said that while the financial outlook for councils was not “as bad as feared” for next year, reliance on council tax would not solve long-term pressures on high-demand services such as such as adult social care, child protection and homelessness. Sir Stephen Houghton, chairman of the local authority LGA special interest group, which represents some of the biggest councils outside London, said councils faced a significant real-terms cut in spending which would have a “significant impact on essential first-line services line and regeneration projects”. District Council Network vice-chairman Sharon Taylor said: “Every individual and every community will feel poorer as district councils inevitably find they have no choice but to cut environmental services, waste collection, recreation and parks. These services improve everyone’s quality of life.” Social housing tenants face rent rises of 7% from next April, the chancellor has announced. While this is less than the 11% they would expect under the standard rent-setting formula, it still represents a significant increase for households paying full rent.
