Cost Of Social Care Could 'Collapse The System' Says West Sussex Councillor

Most upper tier councils in the country will go bankrupt if nothing is done about the cost of social care, a West Sussex councillor has warned.

Jeremy Hunt, cabinet member for finance, spoke during a county council scrutiny meeting.

Mr Hunt said that the pressures placed on social care budgets – which currently make up around two-thirds of the council’s day-to-day spending –  appeared to be ‘growing exponentially’.

He added:

“Unless the next government steps up and addresses these pressures, I’m seriously concerned that the system will eventually collapse due to local authorities not having the necessary resources to fund these services.”

When asked if he subscribed to the idea that almost every upper tier council would be bankrupt if the government didn’t step up, he replied: “Absolutely.”

One of the major issues is the Dedicated Schools Grant (DSG), which is given to the council by the government to cover the cost of schools, early years and services for children and young people with high needs.

In 2023/24, West Sussex received £776,134,705, though the government passes funding to academies and special schools directly, leaving the council with £503,481,124.

While this may seem like a large amount, the authority ended the year with an overspend of £27.876m.

The increasing cost and sheer demand for independent and specialist placements for children with high needs was given as one of the main factors.

The DSG Unusable Reserve – money which cannot be used for day-to-day spending – now stands at a £70.534m deficit, with £28.7m carried over from 2023/24.

Until 2026, the deficit has to be recovered using future DSG income, rather than the council’s general fund.

Mr Hunt said the countrywide funding shortfall could be as high as £4bn by March 2026.

Unless the date is extended further, councils all over the country could find themselves in dire straits, with millions more to find from their already over-stretched coffers.

Mr Hunt added:

“It’s not just poor-run councils. We’re a well-run council and even we’re struggling to fund [this].

“The special educational needs budget, which is part of the DSG, has been inadequate over a number of years, which is why we’ve come to this particular situation.”

The situation was not helped by an overspend of £10.012m on the adult services portfolio – an increase of more than £4m on the third quarter of 2023/24.

The figure would have been £32m but for a number of mitigating factors such as the use of £12m of grant funding.

Mr Hunt warned that grant funding might not be available in the future.

He said: “We need to do everything possible to ensure that we find mitigations to offset any future overspend – or better still, keep within the budget.”