Government won’t claw back £146m paid to councils for delayed Care Act reforms

But no guarantees that local authorities will see full £6bn of cost savings from decision to postpone introduction of care costs cap until April 2020

The government will not claw back £146m paid out this year to local authorities to prepare for Care Act funding reforms that were originally due to come into force next April but were later postponed by ministers until 2020.

Councils received £146m to carry out early assessments of self-funders this year on the basis that a cap on care costs would be introduced from next April. When the government decided to delay the reforms until 2020 questions were raised over whether councils would get to keep the funding or not. Yesterday Jon Rouse, the Department of Health’s director general for social care, told the House of Commons’ public accounts committee the cash will be invested in the social care system.

“Our expectation is that local government will have spent a small amount of that [the £146m] in term of very early preparations before the announcement of postponement was made. Our intention is that the remainder of that money should stay or should be made available to local authorities in respect of the social care system this year,” he said.

The funding pot had previously been distributed to councils based on an estimate of the number of self-funders in each area. Rouse said this approach would need to be reviewed in light of the fact councils would no longer be spending the money on self-funder assessments. Ministers will be making a statement in coming days to outline how the cash will be made available to councils, he added.

The government predicted implementation of the Care Act funding reforms would cost £6bn over the next five years. When asked by the committee whether the full savings would be made available to local authorities, Rouse said this was a matter for the Chancellor’s autumn spending review. The outcome of the spending review will be announced on 25 November.

The committee posed several questions to Rouse and Dame Una O’Brien, the Department of Health’s permanent secretary, on how the government would respond if it emerged local authorities could not discharge their statutory Care Act duties due to a funding shortage.

Rouse said the department was monitoring implementation of the act closely through quarterly surveys of local authorities.

The first set of data returned by councils suggested it was “highly unlikely there will be a problem in 2015-16” but this will continue to be monitored, he said. The first survey also indicated that the introduction of the Care Act’s national eligibility threshold in April had led to levels of eligibility that were “very similar” to those seen by local authorities that had previously used the ‘substantial’ criteria under the Fair Access to Care Services (FACS) system of determining eligibility.

Asked what the government would do if the reforms went “belly up” and didn’t work, Rouse said the government had a “series of tools” to address issues. The first step would be to use the Association of Directors of Adult Social Services’ peer support function to get councils to support each other with challenges they are facing. The second option would be to review the Care Act statutory guidance to see if it is “specific enough”. The third option, which Rouse said the government “wouldn’t look at straight away”, would be to review the statutory regulations underpinning the act.

“We have some tools but the important thing, at least in the next 18 months, is to see if the system is working as intended,” he said.

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