Surrey council has confirmed it plans to raise council tax by 15% because of mounting pressures on its social care budget and children’s services, a move which will lead to a county-wide referendum of residents.
The leader of Surrey council, in the county where the chancellor, Philip Hammond, and the health secretary, Jeremy Hunt, are MPs, said the government had cut the local authority’s annual grant by £170m since 2010, leaving “a huge gap in our budget”.
Confirming plans for the double-digit rise, the Conservative council’s leader, David Hodge, said: “Demand for adults’ social care, learning disabilities and children’s services is increasing every year. So I regret, despite us finding £450m worth of savings from our annual budget, we have no choice but to propose this increase in council tax.”
Since 2012, councils, fire services, and police and crime commissioners are required to hold a referendum if they wish to increase council tax by more than the cap set by central government.
The Labour leader, Jeremy Corbyn, said councils should not be expected to use their budgets to deal with the growing scale of the social care crisis. “It’s not right that we should thrust the social care crisis on local authorities, all of whom have different levels of income,” he told Sky News. “It’s a central government responsibility and central government should face up to its responsibility.”
Critics have cast doubt on the motives for holding a referendum on such a steep hike, given there is such a slim chance residents will vote for the increase. Only one referendum on council tax rises has been held since 2012 and was roundly defeated, with 69% of residents voting against proposals by Bedfordshire’s police and crime commissioner to raise the police element of the council tax by 15.8% in 2015.
The Lib Dem health spokesman, Norman Lamb, suggested the council would use the loss of a referendum to clear the way for cuts to frontline services. “This referendum is just a pure smokescreen for cuts to social care,” Lamb said. “The Tories need to stop passing the buck and get a grip of the crisis.
“When Conservative ministers are being told by their own council leaders that vital services are struggling to cope with funding cuts, it would be extraordinary for them not to take notice. This referendum could be avoided if the government agreed to work with other parties to come up with a sustainable funding solution for the NHS and care services.”
Sajid Javid, the communities secretary, announced earlier this month that he would allow councils to increase charges by an additional percentage point, meaning bills could rise by almost 5% rather than the 4% cap originally planned, without the need for a referendum. More than half the increase would be ringfenced for adult social care, but councils have warned they may need to raise substantially more.
Javid’s department has repeatedly said it was government policy to keep council tax bills low and recently met Hodge to discuss the council’s funding shortfall, particularly for adults with learning disabilities.
Mel Few, a council cabinet member for adult social care, told the Guardian last month that although elderly care and the NHS had been the focus of media attention, the council had more than 1,000 children in transition to adult learning disability services, which would take a huge financial toll.
“That is what keeps me awake at night,” he said. The council’s finances were on a cliff edge, he added, “because even with the 3% rise, we don’t see our way clear at this stage.”
Gary Porter, chairman of the Local Government Association, said: “Social care faces a funding gap of at least £2.6bn by 2020. The government must recognise why social care matters and treat it as a national priority.
“There needs to be an urgent and fundamental review of social care and health before next year’s spring budget. Local government leaders, who are responsible for social care in their local community, must be part of that review. This is imperative to get a long-term, sustainable solution to the social care crisis that the most vulnerable people in our society deserve.”
If residents were to vote in favour of a rise, families living in band D properties would see their council tax rise by £190.24 a year.
Liverpool’s mayor, Joe Anderson, ruled out such a referendum after the council floated the idea last year.
A Department for Communities and Local Government spokesman said: “The government has protected local residents from high council tax rises by allowing local people to veto them through a council tax referendum. If the council sets this proposed budget, then the taxpayers of Surrey will have the final say in a referendum in May. We should trust the people.”
The department said it had announced almost £900m of additional funding to tackle pressures on social care over the next two years. “We are clear that we need to find a long-term sustainable solution, including making sure all councils learn from the best performers to raise standards across the whole system,” the spokesman said.
• This article was amended on 24 January 2017 to clarify that the Bedfordshire council tax referendum was on a proposal for a 15.8% increase in the police part of the tax only.
