Councils selected to pilot cap on care costs

Five English authorities will implement care funding reforms from January 2023, to test their impact before nationwide rollout in October next year

The front cover of the Care Act 2014
Photo: Gary Brigden

The government has selected five councils to pilot the cap on care costs and accompanying social care funding reforms from next January.

The “trailblazer” authorities – Blackpool, Cheshire East, the London Borough of Newham, North Yorkshire and Wolverhampton – will implement the reforms nine months before their national rollout in October next year.

The Department of Health and Social Care said the trailblazers would “generate valuable evidence and insight to help the government to monitor progress, identify challenges and improve understanding of how this will work in practice”.

In draft guidance on implementing the reforms, published earlier in the month, the DHSC said the implementation of the relevant sections of the Care Act would take place earlier for the trailblazers than for the rest of the country.

Assessing self-funders

The five – who are designed to represent a cross-section of communities – will need to start preparing for implementation from now as they will be expected to carry out early assessments of self-funders who want to be considered for the cap from this spring.

Responding to the announcement, North Yorkshire’s corporate director of health and adult services, Richard Webb, welcomed the council’s invitation to join the trailblazers, but said it was not certain the authority would implement the reforms early.

“If initial preparatory work goes well, then a decision will be made in the autumn by the government, working with us, about early implementation in the county from the New Year,” he said.

“The programme is at an early stage and our involvement will mean we can plan ahead, helping to influence how the new policy will be implemented. If good progress is made and value for money demonstrated, then we would hope to be able to pilot the proposed changes ahead of national implementation.”

Webb said the council’s ruling executive would consider North Yorkshire’s participation at a meeting next month, and it would then be reviewed by civil servants in May.

Early assessments – which all other authorities will be expected to carry out from April 2023 – are designed to help councils deal with the hundreds of thousands more assessments and reviews they will need to carry out annually to implement the new system.

The reforms include a more generous means-test for adult social care, raising the upper capital threshold, above which people must fund their care in full, from £23,250 to £100,000. At the same time, the lower capital threshold – below which people receive fully-funded care – will rise from £14,250 to £20,000, though this simply compensates, in real-terms, for the freeze in the threshold since 2010.

Cap on care costs

Their centrepiece is an £86,000 cap on any eligible person’s lifetime expenditure on their personal care.

For people arranging their own care, this will be based on their local authority’s assessment of the cost of meeting their needs – not what they actually spend. It will be set out in an “independent personal budget” and tracked through a “care account”.

People whose needs are met by their council will receive a personal budget, as now, but the government intends only their contributions to their care – not the full cost – to count towards the cap in their care accounts.

An amendment to the Care Act to implement this was overturned earlier this month in the House of Lords but the government will seek to reinstate it this week when the Heath and Care Bill returns to the Commons.

The group of people whose care is arranged by their council is set to increase significantly as the reforms kick in. This is because the government will also  implement provisions in the Care Act allowing self-funding care home residents to request that their authority arrange their care – at council rates.

Care fees gap

Research has found that self-funders pay 40% more than council-funded residents for a bed in the same home, giving private payers a clear incentive to request a council-arranged placement.

Alongside implementing section 18(3) of the Care Act in full, the DHSC is also striving to close the gap between council and self-funder fees by ensuring authorities pay their providers “a fair cost for care”.

All councils will be expected to move towards this over the next three years – backed by £1.36bn in DHSC funding. However, county council leaders warned recently that there was an £850m hole in the government’s funding, which would risk widespread care home closures.

The DHSC produced guidance last week on how councils should use the ‘market sustainability and fair cost of care fund’ in 2022-23, when it is worth £162m. In order to access funding in future years, it said authorities would need to submit, by October 2022:

  • cost of care exercises for care homes for older people and and domiciliary care for all adults;
  • a provisional market sustainability plan, identifying risks to provision in the local market, with a final plan submitted in February 2023
  • a report detailing how funding allocated for 2022-23 is being spent in line with the grant’s purpose.


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