LGA warns on funding 'black hole' for councils as demand soars for adult care

A funding ‘black hole’ – driven largely by demand for adult social care – faces English councils, the Local Government Association has warned.

It said councils would suffer a £5.8bn shortfall between March 2014 and the end of 2015/16, forcing them into savings equivalent to 12.5% of their budgets.

The shortfall would arise from a combination of reduced government funding and rising demand on services, in particular from growing numbers of elderly people.

In adult social care alone there is already a shortfall of some £1.9bn expected by 2015/16 and spending in this area could be protected only by cuts to popular services such as buses, libraries and leisure centres, the LGA claimed.

From next April, some £5.4bn from councils and the National Health Service will be pooled in the Better Care Fund but the LGA said the scale of savings needed showed “the urgent need for the Better Care Fund to quickly succeed in radically improving the way public money is spent on looking after England's elderly”.

LGA chair Sir Merrick Cockell said: "In recent years, local government has worked tirelessly to save billions while protecting services for those who need them most. But the scale of the challenge facing local authorities next year is stark.

“Council finances are on a knife-edge and the old way of doing things – including the way we care for our elderly population – just won't work anymore. Next year will be a make or break moment for adult social care, for local services provided by councils and for the NHS.”

He said the Better Care Fund marked a “a once-in-a-generation opportunity to both improve the quality of life for people in their older years and steer England's social care system away from the road to financial ruin”.

But it would succeed only if there was “a determined effort from councils, the health service and government working together that we can end the vicious cycle of over-spending on a broken system”.

Mark Smulian