Budget 2017: Some answers more questions

The Chancellor must hand the social care purse strings over to local government if he wants the new money to have the right impact. Jonathan Carr-West looks at a budget that delivered no great shocks and still leaves many unanswered questions for councils.

No great surprises for local government or anyone else in this budget. Everything was pretty thoroughly trailed. We got what we were expecting, but what does it mean? Overall the Chancellor was much clearer on problems than on solutions.

Increasingly vocal opposition to business rates revaluation from the private sector made it inevitable that the Chancellor would act to soften the blow of the revaluation.

Councils will be relieved at assurances that “Local government will be fully compensated for the loss of income as a result of these measures” but might experience some trepidation at the Chancellor’s announcement that he would be reviewing the business rate system to find a better way of taxing the digital economy: not because it’s the wrong thing to do, he’s quite right, but because it places still another layer of uncertainty around what is meant to be it’s primary income source post 2020.

The government will set out its preferred option “in due course” and consult.

We also saw this deferral of the really big question in the treatment of the other big issue for local government.

It’s good news of course that the government has responded to pressure from the sector (although perhaps it is just responding to pressure from the NHS) and made more money available for social care.

Of course with a funding gap of £2bn a year, £2bn over three years is not nearly enough. But the government is right to say that social care is not a problem we can simply fund our way out of and that we therefore need more fundamental reform of care funding and delivery.

But on the longer-term question of care funding we await a green paper “later this year”.

In the meantime there’s a risk that the way in which additional funding is delivered makes long term reform harder.

We’re told that “alongside additional funding, the Health and Communities Secretaries will announce measures to identify and support authorities which are struggling, and to ensure more joined up working with the NHS.

But this type of management from the centre is exactly part of the problem.

Social care is not just about freeing up hospital beds, important though that is, it’s about managing the overall well being of the people who live in a place. That connects with health care but also with housing, keeping people healthy, management of public space and local economies.

That’s why social care can only really be delivered by local bodies not by national agencies.

So we need to fund local government to deliver social care but then we need to trust it to spend the money locally across the system in the ways that work best for that area. Micromanagement of how the money is spent will be expensive, ineffective and a step in the wrong direction.

Jonathan Carr-West is Chief Executive of LGiU.

This article first appeared on Public Finance, 8th March 2017.

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