Last week the government announced new plans for social care funding. Responding to Andrew Dilnot’s recommendations, Jeremy Hunt set a cap of £75,000 on people’s contributions to the costs of their care, and raised the ‘asset threshold’ to £123,000. It means that from 2017 anyone with an assessed care need, and assets below the threshold, will be eligible for at least some state support for social care costs, with the amount they contribute capped at £75,000.
There is some good news. For people whose care costs exceed the cap, the state will step in and pay the rest of the costs for their lifetime. Raising the assets threshold by nearly £100,000 to £123,000 means that far more people will be eligible for some degree of state support for their social care, and people who develop care needs during working-age will have a lower cap.
But serious concerns remain.
First, the £75,000 is too high to be relevant to many people – over twice the level Dilnot said would be most appropriate. Only a small minority of people currently incur social care costs over £75,000. For the rest, this cap will not give much assurance. Having to pay up to £75,000 is, contrary to what Jeremy Hunt might think, far from a small amount. Add to that the cost of residential accommodation, food etc – not included in the cap – and many people will find they still have to use up all their savings, and homeowners may still find they have to sell their houses. Also, the cap only equates to the costs of social care that could be purchased by local authorities – meaning people’s actual bills from providers could be substantially higher.
Second, for people with low levels of financial assets – like the two-thirds of older people in my borough who live in social rented accommodation and have an average annual income of £6,000 – last week’s announcement is irrelevant. Instead, what really matters is whether the government will fund local authorities adequately to pay for the care people need.
Pressure on local authorities’ social care budgets is already high. The number of people reaching old age – with additional social care needs – is increasing rapidly. At the same time, our budgets are shrinking. Over £1.8 billion has been taken from local council budgets for older people’s social care since 2010, thanks to cuts from the Tory-led government.
But, with an ageing society, we should be funded adequately to provide social care, including preventative measures. In Southwark we are doing everything we can to support people to live independently, in their communities, for longer; and joining up with the health system to prevent avoidable conditions and hospital admissions. We’re investing in a pioneering day centre of for people with dementia; we provide reablement, home adaptations and homecare, for example.
But London Councils research showed in January that, due to increasing demand for social care, and cuts in funding from government, London councils alone are already facing an £907 million gap in their budgets by 2018.
Introducing a cap and increasing the asset threshold is welcome. But this is only half of the deal that’s needed. The other half – that is missing – is for the government to commit adequate funds to local authorities so they can meet the needs of the increasing number of people who will be eligible for state support. Additionally, last week’s announcement will require councils to allocate resources for annual assessments and monitoring of self-funders who want to take advantage of the cap. The inheritance tax proposals will only pay for part of the costs of the new system.
What’s needed is a funding system that gives certainty and assurance to people facing social care, and that takes away the fear that many people have around having their needs met in old age. We need assurance that the government will adequately fund services for all who need them.
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Catherine McDonald is cabinet member for health and adult social care in Southwark. She is also a member of the LGA health and community wellbeing board. She tweets at @cath_mcdonald
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Unfortunately I am afraid that this measure doesn’t help the poorest, but will subsidise the wealthy to pass on inheritance to their children. This Economist article shows who benefits http://www.economist.com/news/britain/21571931-government-has-crack-social-care-old-old-times
We should focus on the basis quality of care provided for all as a minimum (whatever the means of the resident)
Paul Brant
Catherine – great article, surprised I hadn’t come across it until today. In general, I agree with the points made. A 75k cap protects too few of those who go into care, hotel costs of 10k on top of the 75k means that the cap isn’t as effective as it ought to be.
Paul, it would be difficult to envisage a measure to help the poorest considering that care is means-tested, exempting the poorest from paying. That’s not to say that care measures aren’t needed to help the poorest but I think those measures should revolve around improving the quality of state provided care.
Notwithstanding, the point is that those who are ‘well off’ before entry into the care system are at real risk of funds depleting until they drop into requiring state provided care. One issue is that there is no real security of tenure for the elderly, many of whom will have funds deplete rapidly, and that the absence of this security of tenure will in the long term result in their having to move to a no-frills care home, and in the LA having to pick up the tab.
It is understandable that people want to protect what they have and to an extent, with the current care crisis we will struggle to enable people to do so unless we can address the effect a rise in demand will have on the inflation of social care costs. I don’t think Dilnot or any other proposal on the table goes anywhere near dealing with how we might do this but it does look as if we need to start building more care homes or at the very least ensure there are enough homes for independent living.
Now is it just me or is the real problem that very few people with assets want to be in a position where they are faced with the prospect of receiving state funded care? And to me, that says more about the reform we must need to make to those in receipt of state provided care, than those who self-fund.