Councils in England fear they will have to make budget cuts of 20% and face a social care funding shortfall of £3.5bn due to the coronavirus pandemic.
Labour claims local authorities are facing a £10bn black hole as they encounter spiralling costs while revenue streams such as parking charges dry up amid the lockdown.
Cuts of up to 21% could be needed to balance the books, according to the analysis by Labour, seen by the Guardian. They could see a shortfall of up to £3.5bn across the local government social care sector, with 225,000 adult social care places put at risk within this financial year, it says.
The government announced on Tuesday a further £600m for social care, on top of £3.2bn given to councils in the last two months. Communities secretary Robert Jenrick told the Commons on Wednesday: “I said we would stand behind councils and give them the funding they need and we are doing exactly that.”
Richard Watts, leader of Islington council in north London, said it is inevitable the authority will have to make cuts to their £90m annual social care budget. “Social care accounts for just over half of what councils spend so its inescapable that if you take that much out of the budget youll have to look at social care,” he said.
“I rather suspect you could shut almost everything else, switch to one monthly bin collections and the figures are so big you would still have to go into social care.”
James Jamieson, chair of the Local Government Association (LGA) and Conservative leader of central Bedfordshire council, has estimated councils will face costs of nearly £13bn to tackle the crisis this year.
Of the 225,000 adult social care places at risk, 178 would be long-term care places, according to Labours analysis.
Nick Forbes, leader of the LGA Labour group and leader of Newcastle city council, said: “The funding gap that councils now face is terrifying. Social care is largely funded by councils up and down the country, and makes up a huge proportion of our spending. We have a legal duty to balance budgets, so unless the funding gap is closed then cuts are inevitable.
“Councils have been trying to care for more people with less money every year for a decade, but unless the government acts there is only so much councils will be able to do to protect those most in need.”
The analysis comes as councillors claim they were told to expect to share the financial burden of fighting the virus by Jenrick, who also said local authorities should not “labour under the false impression” that all of their costs will be reimbursed.
There is also concern that councils have been asked to give estimates to the government on what is needed based on a lockdown period lasting three months only. Labour has said it is obvious that some elements of restriction are due to continue for longer.
Shadow communities and local government secretary Steve Reed said: “This government promised to do whatever it takes – if our loved ones see care taken away in their hour of need it will be devastating and unacceptable. The government should change course now.”
Councils are suffering revenue losses during the coronavirus pandemic, with closed car parks leading to zero income in April for some local authorities. There has also been a severe reduction in council tax as thousands move onto universal credit. Business rates and rents from commercial properties have also been drastically reduced due to the pandemic.
A local authority source said budgets set for this year have effectively been “ripped up” and they cannot wait for the December local funding settlement to see a cash boost.
Labours analysis shows that if local authorities did not touch their social care budgets, to make cuts they would have to close all libraries, childrens centres, leisure centres, stop all spending on parks, turn off all street lights, carry out no winter gritting, end all planning and building control work.
Unison general secretary Dave Prentis said: “Making sure council services dont collapse because of the extra costs caused by the virus and income losses from the lockdown have to be a priority for ministers.”
A spokesperson for the Ministry of Housing, Communities and Local Government said: “Were giving councils an unprecedented package of support, including £3.2bn emergency funding, to tackle the immediate pressures they have told us theyre facing.
“This is on top of English councils core spending power rising by over £2.9bn this financial year and today we announced a further £600m to help reduce the infection rate in care homes.
“The government will continue to work closely with councils as the pandemic progresses to develop an ongoing assessment of costs as they support their communities through this national emergency.”
The department also said councils will be allowed to defer £2.6bn in business rates payments to central government and that they have been paid £850m in social care grants upfront in April.