A 2% council tax surcharge introduced by George Osborne last year to help pay for adult social care in England has failed even to cover the additional cost from the Chancellor's National Living Wage, according to a new report.
The optional precept will raise less than two-thirds of the £600 million-plus annual cost of paying social care workers aged over 24 the £7.20-an-hour minimum wage which came into effect in April, said the Association of Directors of Adult Social Services (ADASS).
ADASS president Harold Bodmer warned that councils needed to fill a £940 million funding gap just to keep services operating at last year's levels and warned that the country was "at a tipping point where social care is in jeopardy".
A survey of all 151 adult social services directors in England found that 70 had experienced a fall in budgets, despite an overall increase in sums available nationally from £13.65 billion to £13.82 billion. Some 62 said they had drawn on reserves and 52 had cut services in response to shortfalls.
Four-fifths (80%) of directors reported that care providers were facing financial difficulties, with some closing care homes or handing back contracts to councils.
Mr Bodmer said: "Councils are working hard to protect adult social services budgets, with adult social care accounting for 35% of council spending for the third year running.
"However, with more people needing support and having increasingly complex needs, the impact of the welcome National Living Wage and other cost pressures, fewer people are getting help and councils are having to make reductions which will impact on people who receive care.
"We have been arguing for some time now that adult social care needs to be given the same protection and investment as the NHS. Services are already being cut and the outlook for future care is bleak.
"We're at a tipping point where social care is in jeopardy and, unless the Government addresses the chronic underfunding of the sector, there will be worrying consequences for the NHS and, most importantly, older and disabled people, their families and carers."
Local Government Association senior vice-chairman Nick Forbes said that the 2% council tax surcharge amounted to Government acknowledgement of the "urgent need to tackle our adult social care funding crisis".
He warned: "As this helpful report makes absolutely clear, the extra income this year will not bring in enough money to plug growing funding gaps and prevent the need for further cutbacks to social care services.
"Councils will continue to do all they can to maintain the services that older and vulnerable people rely on but there is little scope left for further efficiencies to be made."
Mr Forbes called on the Government to bring forward £700 million of social care funding earmarked for the end of the decade to allow councils to protect services.
A Department for Communities and Local Government (DCLG) spokesman said: "Supporting those most in need is an absolute priority.
"That is why we have provided a social care package worth £3.5 billion by 2019-20, compared to the £2.9 billion councils said they needed.
"This Government has devolved new powers and funding to local areas so they can integrate health and social care, provide better services for older people, and plan for an ageing population.
"Data published last month, based on reports from local authorities to DCLG, suggested that they plan to spend an extra £308 million this year on adult social care."