Social care driving cost pressures as councils face £2bn funding gap

Rising costs and demand in social care are driving cost pressures on councils as they warned they face a more than £2bn funding gap in 2025/26.

(c) Anthony/Unsplash

(c) Anthony/Unsplash

The Local Government Association (LGA) warned the chancellor to avoid any ‘disastrous' further cuts in the Autumn Budget next month.

LGA chair Cllr Louise Gittins said: ‘Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.'

The LGA said costs in children's social care due to rising complexity and placement expenses were soaring while home-to-school transport costs for children with SEND had surged due to a 62.7% in Education, Health and Care Plans from 2018/19 to 2023/24.

In addition, rising costs and demand in adult social care have driven a £3.7bn (18.1%) increase in budgeted spend from 2019/20 to 2024/25 while homelessness service costs have surged by £604m (77.4%) since 2019/20, driven by asylum, resettlement issues, and housing shortages and record spend on temporary accommodation. 

Furthermore, there is growing pressure on councils' Dedicated Schools Grant budgets due to increased demand for services for children with special educational needs and disabilities. The ‘deficit' on the provision of these services is forecast to reach £5bn by 2025/26.

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