Hertfordshire County Council is set to write to the Secretary of State outlining its 'dissatisfaction' at an £8.5m cut to adult social care from Herts Valleys CCG.
The Clinical Commissioning Group informed the county council that it was going to withdraw the funding on December 2.
It came shortly after an 'Investment Committee' was set up by the CCG to examine all areas of spending - with the aim of eliminating the CCG's projected overspend of £15m for 2017/18.
The investment committee was set up on November 24, and asked for a report on the funding on November 28. Just over three days later the council was notified by telephone that the funding would be withheld.
The council believes that the withdrawal of the money will place greater demand on GPs and hospitals, as well as greater numbers of older people delayed in hospital and unable to return home.
A reduction of £8.5m in the care budget is equivalent to 40 per cent fewer care visits for every person receiving home care in West Hertfordshire alone.
The Health Scrutiny Committee of the council this afternoon passed a motion recommending that the council report the CCG's decision to the Secretary of State as it was 'not satisfied that there was any consultation' on the decision, and that the funding cut is 'not in the best interests of the health service in Hertfordshire'.
It has only made such a recommendation once before in its 15 year history - and will be considered by the full council on February 21.
The motion was proposed by Councillor Ron Tindall, who is the Liberal Democrat opposition portfolio holder for adult care services at Dacorum Borough Council, as well as a county councillor.
He told the Gazette: "We should not accept the CCG decision to deny us access to the £8.5m as this is a crucial part of the social care funding for the coming financial year.
"It's going to be extremely difficult for the council to maintain its services should we not have it.
"The decision from the CCG is not only wrong, but I believe is not taken lawfully as they failed to consult and neither did they carry out an impact assessment."
The chair of the health scrutiny committee, Cllr Seamus Quilty, added: "The decision, which the committee has reached unanimously, has not been taken lightly. It is indicative of the severity of the impact on the health of Hertfordshire's residents that the withdrawal of funding will cause."
Herts Valley Clinical Commissioning Group said it had requested a report from the council breaking down how this year's fund had been spent, but had not yet received it.
It added in a response published in the meeting's agenda that it was 'seeking evidence that the £8.5m paid out for this year had delivered improvements'.
The written response to the health scrutiny committee added that it 'understood there would be an impact', and that county council colleagues 'will need to work out how best to use the reduced resource'.
Nicolas Small, chair of Herts Valleys CCG, said: "For the past two years, we have received and agreed to requests from colleagues in Herts County Council (HCC) social care to provide additional funding to help meet shortfalls in their own budgets.
"These are lump sum payments and for this year, 2016/17, the amount is £8.5m. We are one of only a few CCGs who have made these one-off payments; it is not usual practice.
"Our financial position is now different, having deteriorated considerably, and we are predicting we will end the financial year in deficit. This has serious implications for next year (2017/18) and this is why we are reviewing all our expenditure and why we are not able to continue to provide that extra funding of social care.
"The county council has a legal duty to provide social care; ours is to provide health care and that must be our priority. This doesn’t mean we don’t support social care; we do and to the tune of around £9.5m this year via, for example, the better care fund which continues and is not affected by this decision.
"We had a lengthy debate at Hertfordshire County Council’s health scrutiny committee, explaining our financial position and the rationale for our decision.
"We are sorry that councillors did not appreciate the very difficult decisions we need to make and that we have a duty to consider how we spend all our healthcare money, with a legal requirement to meet financial targets,together with aduty to prioritise the commissioning of health services.
"It was also disappointing not to have gained an understanding that our decision is not a ‘cut’ or a ‘withdrawal’ as there was never any on-going commitment to continue this; they were one-off payments agreed, following specific requests, as individual payments in each of the past two years."
The Secretary of State will have the final decision on any action taken by either the CCG or the council.