Your chance to influence review of social care funding

The introduction of a cap on individuals' liability for social care means the way government funding to is allocated to councils will have to change. Jude Ranasinghe explains how social care leaders can get involved in shaping this process.

Picture credit: Image Broker/Rex Features

The government has confirmed that, subject to legislation, it will introduce a cap on reasonable care costs from April 2016, set at £72,000 in 2016-17 prices. There will also be new financial protection for those with modest wealth in residential care, as, from 2016-17, anyone with assets of £118,000 or less will receive funding on a sliding scale towards their residential care costs, compared with an upper threshold of £23,250 currently. In addition, from 2015-16, people who cannot afford reasonable residential care charges without selling their home will be able to defer the fees.

These changes are expected to increase the number of people who are now eligible for local authority financial support for social care and reduce the number of self-funders (though costs will be recoverable with interest in the case of deferred fees). Data from the 2012-13 Care of the Elderly People UK Market Survey by Laing and Buisson estimates that approximately 43% of older residents in care homes are paying for the full cost of their care and a further 14% are paying some contributions to their care costs to top-up basic funding from local authorities (partial funders).

The government has already estimated the total costs associated with the introduction of the cap and research is now required to gather more comprehensive data on self-funders and assess how this funding will be distributed between individual local authorities.

Transformation of social care

In addition to the recent social care funding reform proposals, since the last review of the distribution of social care funding in 2005, the delivery of care has altered significantly, following a range of legislative, organisational and demographic changes. Services now reflect greater use of personalisation, reablement. telecare, intensive home care, and the transfer of responsibilities from primary care trusts for some people with learning disabilities.

Within this twin context of changes in means of service delivery and funding reform, the Department of Health has commissioned a significant piece of research to be undertaken by public sector funding specialists, LG Futures, and the Personal Social Services Research Unit (PSSRU) at the University of Kent/London School of Economics and Political Science.   The research will review and develop new funding formula(e), capable of being implemented from 2015-16, which could be used to inform the distribution of funding for:



  • DH specific grants and NHS funding for social care;
  • The introduction of the universal deferred payments scheme from 2015; and
  • The introduction of a cap on reasonable care costs and additional financial protection for people in residential care from 2016.

It would also be available for the government to consider in relation to core government funding for local authorities in England, when this is next reviewed, some time after 2019-20. 

Limited data on self-funders

The research requires extensive data collection involving local authorities, to allow the research team to investigate how the need for care varies across and within authorities. There will also be a particular research focus on the needs and costs associated with self-funders, given that there is currently only very limited data available on self-funders and their future needs, particularly within the context of funding reform.

Many self-funders do not have any contact with local authorities, managing their care needs through private provision, without undergoing a local authority assessment. Where they do have contact with local authorities, only limited information may be captured about their needs and financial circumstances.

Therefore, in order to distribute funding to local authorities to support the new cap, it is important to derive more robust estimates of how many self-funders could become eligible for funding, how much funding will be required to support them, how the needs of self-funders differ from local authority funded clients and how will this vary between local authorities.

We’re looking for up to 50 local authorities to participate in the research, to take place over summer/autumn 2013, taking into account different types of authority and different characteristics. We need a cross-section of authorities representing rural and urban areas, small and large authorities and with variations in deprivation and economic indicators.

In relation to self-funders, the research team are investigating a range of different data collection options. The research will include an analysis of national data sources, such as Census 2011 and existing surveys, in addition to primary data collection, potentially working with local authorities and residential care homes to undertake a survey of care home residents.

A robust funding formula

The more authorities and stakeholders that we can involve in the research, the better the chances of developing a robust and representative formula, which will take into account not just the needs for social care, but how the new funding reform will impact on the financial liabilities of each local authority. Local authorities that participate in the research can ensure that their particular circumstances are included in the analysis and find out directly how the funding formulae are being developed, and the likely impact on them.

We are particularly interested in hearing from local authorities who have undertaken research to understand the needs of self-funders in their area; for example, by undertaking surveys or analysis to identify individuals whose funding arrangements may change in the future, as their assets reduce and they become eligible for local authority support.

To find out more about the research project, and if local authorities would like to become involved in our work, please contact Jude Ranasinghe, Director of LG Futures, on jude.ranasinghe@lgfutures.co.uk or on 01908 424387.

This research has been commissioned and funded by the Policy Research Programme in the Department of Health. The views expressed in this article are not necessarily those of the department.

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