Conservative manifesto pledge to implement cap on care costs is unfunded, warns think-tank

A Conservative manifesto pledge to implement a cap on adult social care costs and associated charging reforms is unfunded, a think-tank has warned.

The Institute for Fiscal Studies (IFS) said the plan to implement the changes in October 2025 would require cuts elsewhere, because the funding originally allocated to the scheme had been diverted and the party did not allocate any funding to the policy in its manifesto costings.

In their election manifesto, published today, the Tories pledged to enact “planned reforms to cap social care costs from October 2025”, a timetable established in 2022 when the government delayed its original implementation date by two years.

Original care cap funding diverted

Ministers had earmarked £3.6bn from 2022-25 to implement the reforms, including an associated plan for councils to pay providers a fair cost of care (see box above). The IFS said that ministers had also budgeted further funding for the reforms up to 2027.

The delay enabled councils to retain the 2022-25 allocation to shore up their social care services, with £3.14bn made available for adults and children’s services from 2023-25 and the rest retained for the fair cost of care policy.

While the government has not set spending plans for 2025-26 onwards, it has pencilled in real-terms public spending increases of 1% a year up to 2028-29, against a 2024-25 baseline.

The IFS said ministers had rolled the resource allocated from 2025-27 for the charging reforms into these “tight” spending plans, meaning it was not available to implement the policy.

Pledge entails cuts elsewhere, says think-tank

The think-tank said likely and planned increases to the NHS, defence, overseas aid, schools and childcare budgets, under a re-elected Conservative government, meant “unprotected” service areas, including local government and social care, faced cuts.

“With no funding in the manifesto for this policy, paying for [the adult social care charging reforms] would therefore further deepen cuts to other unprotected service areas,” the IFS added.

Fellow think-tank the Nuffield Trust also raised concerns about the deliverability of the policy, with chief executive Thea Stein saying: “Given the state of local authority finances and the fact that the original money earmarked for the cap has been redirected into day to day running costs, it is difficult to see how this promise can be fulfilled.”

For the King’s Fund, chief executive Sarah Woolnough said that it was “positive” that the Conservatives had recommitted to the charging reforms, though she added: “To meet that challenging deadline for implementation, there will need to be sufficient local authority funding and capacity to get the reforms off the ground.”

The Conservative Party has been approached for comment on the issue.

Labour’s manifesto did not mention the charging reforms at all, though shadow health secretary Wes Streeting subsequently will be published on Thursday (13 June); it has previously said it is committed to the charging reforms but has not set out how it would be paid for.

MHA reform restated, but no reference to LPS

The Tory manifesto also pledged to continue with the broader social care reforms set out in policy papers in 2021 and 2023, including improving housing for older people, support for unpaid care and workforce recruitment and retention, including through enhancing training.

The party also restated its commitment to reforming the Mental Health Act 1983, saying it would legislate to do so in the first parliamentary year after the election.

This repeats a commitment from the Conservatives’ 2019 manifesto that it failed to fulfil, despite publishing draft legislation to overhaul the act in 2022.

However, there was no reference to reviving the Liberty Protection Safeguards (LPS), the replacement for the Deprivation of Liberty Safeguards, which the government shelved last year, having originally planned to implement it in October 2020.

Local government funding

The Conservatives also said they would provide local authorities with multi-year funding settlements.

This answers a longstanding call from council leaders for the government to end its approach of financing the sector on a year-to-year basis, undermining authorities’ ability to plan.

However, responding to this on X (formerly Twitter), the Association of Directors of Adult Social Services said that, while welcome, this was insufficient to address the pressures on social care.

Our Directors have long called for multi-year funding to plan & invest in local care & support over a no. of years, instead of relying on cash injections. But this alone isn’t enough, we want to see a commitment to a fully funded plan to meet our country’s care & support needs.

— ADASS (@1adass) June 11, 2024

Welfare reform plan criticised

Overall, the manifesto pledged tax cuts or additional spending worth £17.7bn a year by 2029-30, which the party said would be paid for by tackling tax evasion and avoidance (£6bn) and reforming the welfare system (£12bn).

On the latter, it referenced proposals set out in a policy paper published in April this year to curb spending on personal independence payment (PIP), which is designed to meet the extra costs of disability for people of working-age.

Plans include tightening criteria to access personal independence payment (PIP) and potentially replacing cash payments by services for people with mental health conditions, on the grounds that they may not face the same costs as people with physical impairments.

According to government data, the number of PIP recipients rose from 2.2m to 2.8m from 2019-20 to 2022-23 and is projected to rise to 3.8m by 2025-26.

However, the IFS seriously questioned whether the party could make savings on the scale it envisages from either cutting the numbers on PIP or reducing the value of the support they receive.

“The manifesto contains very little information on what kind of policy the Conservatives have in mind,” the think-tank said. “It is difficult to have much confidence in the £12bn goal.”