Councils to take £250m hit

Author: Local Government Chronicle - Sep 30, 2009

Gordon Brown’s guarantee to introduce a national care service looks set to blow a £250m hole in local authority budgets.

The Department of Health has put the scheme’s annual cost at £670m. It will contribute £420m leaving councils to find £250m.

And a source close to the prime minister admitted councils would have to find the money “through efficiency savings”.

“We will work with local government to identify a burden that can be removed in light of this,” he said.

The source acknowledged the plan – which would commence next September under a re-elected Labour government - would mean extra work for councils.

They said the government did not want to prescribe a solution but councils’ new responsibilities would be compensated for by removing existing work on a “one in, one out” basis.

The source said: “We get accused of landing things on local government – we want to work with them on this one.

“The detail will be worked up with the local government sector more broadly in the coming weeks and months.”

Reacting to the news, one senior local government finance source said: “It’s very nice of the Department of Health to spend our money for us.”

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