RADICAL proposals to transform the funding of adult social care have been welcomed by councils facing "crisis point" over maintaining the service.

Bosses at North Yorkshire and Darlington councils said the introduction of a Social Care Premium could be part of the solution in securing the viability of adult social care.

Following a cross-party parliamentary inquiry, MPs have recommended the premium be paid either as an extra element of National Insurance or into a dedicated not-for-profit social insurance fund.

To ensure fairness between generations, the Commons housing, communities and local government committee and the health and social care committee said the premium should be paid by those aged over 40, including retired people, and employers.

Last year in an effort to relieve adult social care funding pressures, the Government allowed councils to levy an adult social care precept on council tax up to a maximum six per cent, but it is unclear whether this will extend beyond the 2019/20 financial year.

Meanwhile, Care England, the largest representative body for independent providers of adult social care, has said the financial outlook for many local authorities is "very bleak".

Darlington's adult social care boss Councillor Sue Richmond said the current system of funding adult social care was not fit for purpose, with rising numbers of elderly people and those with complex needs, and unless changes were introduced adult social care could be the council's only remaining service.

She added: "Increasing council tax to pay for adult social care is not right and is not a sustainable solution. This is starting to put adult social care in the context it needs to be considered."

Her counterpart at North Yorkshire County Council, Councillor Michael Harrison added: "It is clear a long-term solution to the funding of social care is desperately needed. Initiatives such as this are one of the potential solutions, and I hope the government will act with urgency to bring forward proposals in their green paper."

The North Yorkshire authority spends 42 per cent of its budget on the social care of older people and vulnerable adults, and councillors have regularly highlighted how maintaining that service has led to unpalatable cuts to its other services.

Darlington council's leader, Councillor Bill Dixon said: “Councils are required to fund social care so it is other services that get squeezed as a result of the Government’s ongoing reductions in funding.

“The system of funding social care is broken and needs addressing before we get to a crisis point.

“In Darlington we have worked hard and taken tough decisions to ensure we have adequate funding to support the most vulnerable in society, but this has been very challenging and other services have had to be reduced or stopped altogether."

Mr Dixon said 70 per cent of the council's annual £76m budget was being spent on social care, which is a statutory responsibility.

Paul Wildsmith, the council’s managing director, said: “We would prefer proper funding to be put in place, but if this is not forthcoming then a signal that the precept remains will help councils plan better in the medium term.”

Councillor David Walsh, a cabinet member for adult social care at Redcar and Cleveland Council, added: "We have utilised the receipts from the precept powers, but it is effectively asking a poor area with a low council tax revenue base to help sustain growing demand.

“Paradoxically, those areas with a growing council tax base are often areas with a lower than averaged aged population, and thus a  lower demand.

“It appears there is no new cash now so my guess is that the precept will be with for us long as the Government lasts.   In the meantime, it is critical that Labour starts to put real flesh on the bones of policy for social care development and funding, as we can't just rely on slogans. 

“Governments have been kicking this ball into the long grass for decades and now the scale of the problem is coming home to roost."

Days after the government announced its green paper proposals on adult social care funding had been delayed until the autumn, the County Councils Network, which represents 37 local authorities, including Durham and North Yorkshire, warned ministers several councils could go bust.

It said two-thirds of councils would struggle to balance their budgets by 2020/21 without extra funding and an emergency injection of funds was needed to counter a growing financial black hole.

Analysis suggests county councils face a £3.2bn gap between income and costs over the next two years due to a combination of factors including Government cuts and rising social care bills.

Thirsk and Malton MP Kevin Hollinrake said he supported the Social Care Premium proposal.

The Conservative politician said: "Despite the Prime Minister’s recent announcement that there is to be a further £20.5bn for the NHS, that’s the equivalent of £394m a week, the funding gap for social care is estimated to be around £2.5bn in the next financial year alone. So we need a radical new system.

“The simple fact is that we must find a solution for the one in ten of us who will face catastrophic care costs of over £100,000. The proposed system would be simple, scalable and sustainable and operates very successfully in other countries, such as Germany and Japan."

Cllr Richmond said the Government needed to recognise that the NHS and adult social care were "inexorably linked" and funding for prevention needed to be maximised.

She said: "There is no easy answer. It has reached a perfect storm."

A spokesman for the Department of Health said: “We recognise the social care system is under pressure and we’re committed to reforming it to ensure it is sustainable for the future.

“Health and social care are two sides of the same coin and any reforms must be aligned –that’s why our forthcoming Green Paper will be published in the autumn with the NHS plan.

“We have provided local authorities with £9.4bn in dedicated funding for social care over three years and will agree a sustainable funding settlement at the forthcoming spending review.”