Taxpayers face a “stealth” council tax increase of up to 5% next year under Chancellor Sajid Javid’s plans to boost cash-strapped social care budgets.
Javid used Wednesday’s spending review to announce a £1.5bn funding increase for social care from next year.
But £500m of the cash will come from taxpayers under plans to allow town halls to hike council tax by 2% to fund the overstretched sector.
Shadow Chancellor John McDonnell described it as a “stealth tax” that would “go down like a lead balloon” with local authorities.
The issue has proved a major headache for the Tories since Theresa May was forced to abandon plans for a so-called “dementia tax”, seen as a major factor in the party losing its majority in the 2017 snap election.
The Tories’ planned social care green paper to address the huge long-term challenges in the sector has been delayed at least six times since 2017.
Critics said the money announced by Javid was merely a “sticking plaster”.
Taxpayers have been facing higher bills since the precept was created in 2017 to allow local authorities to hike council tax by up to 2% to fund social care – on top of the 2.99% rise already allowed without a council having to hold a local referendum.
Javid has now announced that the precept will continue from April 2020.
Speaking to reporters, McDonnell said: “It is a stealth tax.
“He should have been more straightforward about how they were going to fund social care overall.
“It will go down like a lead balloon with local authorities.”
Shadow Communities Secretary Andrew Gwynne said: “Instead of properly funding our local services, the government is pushing the burden onto struggling families and business through increased council tax and increased rates.
“This isn’t a sustainable way to fund our vital services.”
In the Commons, Javid said the money would provide “a solid foundation to protect the stability of the system next year and a down payment on the more fundamental reforms the prime minister will set out in due course”.
Torsten Bell, director of the Resolution Foundation, tweeted: “On social care this is more of the same, i.e. short term sticking plaster of cash now and a promise of a real plan tomorrow.
“That record has been playing for 15 years.”
The Alzheimer’s Society said it was “disappointed” the government had failed to create an NHS dementia fund.
Jeremy Hughes, the charity’s chief executive, said: “One billion can only stave off the utter collapse of our social care system, neglected by successive governments for so long.
“On Monday the prime minister assured us that he will sort out dementia care, once and for all. He agreed that people with dementia must be treated the same as those with other health conditions.
“We now need to see concrete plans for reform that address the unfair and catastrophic care costs for people with dementia, and the daily battle that they and their families face to get the care and support they so badly need.”
Tory MP Kevin Hollinrake, who sits on the health joint Commons select committee which examines social care, described Javid’s announcement as “good news”.
“But we also need a long-term solution, such as the social care insurance premium proposed by the joint committee,” he added.