Ministers are looking at increasing Council Tax to pay for social care but have been warned that it will not tackle funding problems which are “out of control”l Experts, including the former Tory health secretary Stephen Dorrell, have warned of a growing cash crisis hitting Local Government and the NHS.

The government is preparing to allow tax precepts to be increased so local councils, which have suffered reductions in Government grants totalling more than 40% since 2010, can claw in extra cash to cover the spiralling social care costs.

Izzi Seccombe, the Conservative Chair of the Local Government Association’s Community Wellbeing Board, confirmed that the idea of an increase in the precept was being considered. “We have had some dialogue with ministers about this,” she told BBC Radio 4’s Today programme on Monday.

But she said the money raised from such a move would not be enough. Seccombe pointed out a 2% increase in precept imposed by most councils last year raised only £380m, which was not enough to pay the £600m needed to cover increased staff costs under the “national living wage”.

She also warned that a rise in council tax would create a postcode lottery in services because richer areas could raise more than poorer areas where the need is greatest. Seccombe called for emergency funding. “We need an injection now of £1.3bn because there is a shortfall by the end of 2020 of £2.6bn.”

Stephen Dorrell, who is now the chair of the NHS Confederation, said the shortfall in social care was spilling over into the NHS because discharged hospital patients had nowhere else to go. He said: “What we are talking about is a cash shortage that is threatening the stability not just of local government but of the National Health Service. Unless we address this seriously, we will simply see a failure of service across the range of local public services and people will suffer as a consequence.It comes when people find they can’t have access to care homes, so they end up in A&E and GP surgeries. They can’t be discharged from hospital when they are fit and ready to go.”

This article appears 12 December 2016 in The Guardian, The Sun, The Daily Mail, Telegraph and covered by BBC News