Families who are already struggling to make ends meet due to rising food, petrol and energy costs will find their pockets are about to be emptied as they will have to find an extra £500 a year. The Local Government Association (LGA) says councils need a 25 percent rise in public funds to pay for social services because of an ageing population – and the money will have to come from somewhere.
An extra £8billon is needed to pay for social care services, as well as child protection, waste and recycling and road maintenance as councils face severe funding pressures.
It could result in Council Tax soaring over the next three years – meaning struggling households will find their finances are squeezed even more as they are asked to find an extra £500 a year, on average, for Council Tax.
LGA chairman James Jamieson said: “Councils continue to face severe funding and demanding pressures that will stretch the local services our communities rely on to the limit.
“Securing the long-term sustainability of local services must therefore be the top priority in the spending review.”
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The LGA said the money will be used to invest in strengthening communities and tackling healthcare issues and is calling on the Chancellor to use the Spending Review to create an ongoing Community Investment Fund worth £1billion in 2022/23.
It says £1.1billion per year is needed for adult social care, £0.6billion to fund children’s social care and another £0.9billion is required to pay for other council services excluding education, police and fire services.
Meanwhile, 50 charities including Age UK, Marie Curie and Care England have written an open letter to Chancellor Rishi Sunak asking that he finds billions more in cash to inject into social care in his Spending Review.
Without this extra cash injection, they claim Boris Johnson’s plans to fix social care will fail miserably.
How much extra will households have to pay?
The average Band D council tax bill in England soar from the present £1,898 to £2,372 – a rise of £474. However, currently councils do not have the power to raise council tax this much without a local referendum.
This news of a potential council tax rise couldn’t come at a worse time – families are already finding their finances squeezed from soaring petrol costs, food prices and energy bills, with a planned rise in National Insurance also due to come into force next year.
National Insurance rate will go up by 1.25 percentage points – with the starting rate for National Insurance contributions at 12 percent for lower earners, this would mean a rise to 13.25 percent.
This would mean someone on a salary of £15,000 a year would pay an extra £54 in taxes, while anyone on £30,000 would see their NI contributions rise by £204 from £2,452 to £2,656.
It also coincides with the end of the stamp duty holiday and the £20 a week Universal Credit uplift.
Yesterday, however the government did announce a new £500million support fund to help low income households survive the winter.
Joe Cox, Senior Policy Officer at Jubilee Debt Campaign called it a “sticking plaster for the gaping wound” that would result from cutting Universal Credit by £20 a week.
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