Government must not claw back funding for care cap after shelving policy, warn councils

The government must not claw back £146m given to councils to prepare for the planned cap on care costs, after ministers decided to shelve the policy.

That was the message from council leaders after last week’s decision to defer implementation of the Care Act’s reforms to social care funding by four years, to 2020.

The changes – a cap on the costs of care for individuals and more generous means-tested support for homeowners receiving residential care – had been due to come into force in April 2016.

They would have heralded a significant expansion in the reach of the adult social care system, with an estimated 460,000 self-funders with eligible needs having to be assessed so that they could start making progress towards the cap.

Policy delayed by four years

However, last Friday, care minister Alistair Burt said the policy would not be implemented until April 2020, saying the £6bn cost over the next five years could not be justified at a time of “consolidation” in the public finances.

This leaves a question mark over what will happen to the £146m already given to local authorities to help them prepare for the implementation of the policy during 2015-16. In a letter issued to authorities in February, the Department of Health said that this money was to help with planning and preparation (£30m) and to carry out early assessments of self-funders from October of this year (£116m).

The planning involved ensuring IT suppliers were able to upgrade their software to deal with the changes relating to the cap and extended means-test, and working with care providers to identify local self-funders.

However, councils will also have had to plan for the workforce implications of the additional assessments they would have needed to undertake from October, which would have involved hiring staff or contracting with providers or voluntary sector organisations.

Money must not be clawed back

The DH is yet to announce what will happen to the £146m. A spokesperson said: “In light of the announcement to delay the reforms we will shortly advise local authorities on what will occur with the implementation funding.”

However, local government leaders warned that the money must not be clawed back.

John Jackson, joint chair of the Association of Directors of Adult Social Services, said councils had been cautious in their planning for the funding reforms because the government had not allocated resources to fund them from 2016 onwards.

However, he said the plans to implement in April 2016 had resulted in additional pressures for councils, adding: “I know that some areas have seen an increase in self-funders coming forward for an assessment and that may still happen even with funding reform not happening for five years.”

He added that the “unsustainable” position meant local authorities needed to retain the £146m. “Everyone I’ve spoken to is predicting a small or significant overspend this year for adult social care,” he added. “Would government want to make that worse?”

His call for councils to retain the money was echoed by the County Councils Network.

“With counties already beginning implementation of the Act, all 2015-16 funding must remain with local authorities,” said Paul Carter, network spokesperson for health, social care and wellbeing.

Call for councils to get full £6bn

Carter said that the network wanted all of the £6bn that the social care funding reforms would have cost over the next five years to be given to local government to deal with the pressures on adult care.

“This additional funding is critical for securing the future of local care markets, delivering health and social care integration and facilitating the development of better community-based services,” he added.

The level of funding available for local authorities to spend on adult social care from 2016-20 will be decided as part of the government’s spending review, which is due to report on 25 November.

Jackson said it was “too early to say” whether additional resource would be provided for adult social care as a result of the decision not to proceed with the funding reforms.

Additional costs from living wage

He said that prior to this month’s Budget, the Local Government Association had estimated that councils would need an extra £700m each year from 2016-17 to keep pace with rising demand for adult social care. However, the Budget’s introduction of the “national living wage” from April 2016 will increase staff costs for care providers, meaning that councils would face an additional bill of £1bn by 2020 because of increases in provider fees.

Jackson added that the restrictions on tax credits in the Budget may also increase pressures on adult social care.

“The question for me is whether the changes to tax credits will drive wages in some lower paying sectors up. If wages go up in the retail sector then adult social care providers will need to increase what they pay to recruit staff. It’s possible then that the tax credit cuts will lead to wages going up as well as the national living wage.”

Will care cap be implemented?

The government’s decision to delay implementation of the funding reforms has sparked concern that the cap on care costs will not be implemented at all.

Former Lib Dem care minister Norman Lamb said the decision meant the policy had been abandoned in an interview with the BBC’s Today programme on Saturday, while this view was echoed in a blog piece this week by Richard Humphries, assistant director, policy, at the King’s Fund.

He said that postponement until the end of this parliament “makes it almost certain…that these reforms will not happen”.