Social care services for county councils are facing widespread funding shortages despite new settlements from the government, according to the County Councils Network (CCN).

The CCN’s response to the Communities and Local Government Committee inquiry into social care said that funding in the 2015 Spending Review and the local government finance settlement is not enough to meet social care demands in the counties.

Counties have received on average 44% less funding for every resident than the national average, despite having a higher proportion of elderly residents.

Over-65s make up 20% of counties’ populations and this amount is due to rise by 2% a year. The rural geography of counties also means that they cover more challenging and mixed areas.

However, the CCN’s submission argued that new methods of social care funding will benefit county councils the least.

If the 2% social care precept was applied in every county council in 2017-18, it would raise an average of £79.58 for every over-65, compared to £110.69 for metropolitan councils and £95.32 for unitary authorities.

The funding through the precept is also largely being absorbed by the cost of the National Living Wage and the increasing rate of Deprivation of Liberty Safeguard assessments.

The Social Care Relative Needs Formula was frozen in 2013-14, further affecting the funding counties receive to meet their social care needs.

The CCN also argued that the distribution of the Revenue Support Grant does not properly reflect the needs of counties, and that this unfairness could be embedded in compensation given to councils after that will lose out after they receive full control of business rates.

Business has varied significantly among counties in recent years, with some experiencing a high rate of growth and some experiencing sharp decline. For all but three CCN authorities, the growth in business rates income as a result of devolution is predicted to be less than the growth in social care demand. The CCN has previously said that redesigning the business rates proposals is “critical.”

The report also warned that a ‘two-tier’ social care market is developing, with residents who can afford it increasingly seeking private care, thus locking councils out of the market.