Health secretary Jeremy Hunt has announced further details of his plan to cap social care costs at £75,000, amid questions from local authorities about their role in putting the new system into place.
Speaking in the House of Commons on Monday, Mr Hunt said the new cap would protect people from the “ruinous costs” of paying for their own care. He said the Conservatives and Liberal Democrats had agreed on a plan that would commit £1bn per year to the new system from 2017 until 2020.
Mr Hunt also told MPs the reforms – which would see a £75,000 cap on the amount an individual paid towards the cost of their care, as well as extra state support for people with assets worth less than £123,000 – were “highly progressive”. The changes would see 70% of the extra funding going to “socially disadvantaged” families, he insisted.
His comments contrast with those of his predecessor Andrew Lansley, who in 2011 described the Dilnot Commission’s proposals, on which the reforms are based, as “regressive”.
Local government figures broadly welcomed the decision to implement a cap on care costs but warned it would likely throw up thorny issues around creating a formula to distribute the funding for the system.
“The Department of Health and the Treasury are certainly looking at ways to distribute the funding between councils”, Sarah Pickup, president of the Association of Directors of Adult Social Services, told LGC. “There would need to be a formula to estimate demand.”
If ministers decide to fund councils to provide the care cap along with the extra demand resulting from raising the threshold for being eligible for state support, then the formulas for the two elements would have different distributional effects.
Ms Pickup said the formula for funding the £75,000 cap would have to be “the converse of the formula that is normally used, which is greatest deprivation and highest levels of need”, because funding would have to be channelled to areas where higher numbers of people were wealthy enough to be funding their own care at present. Funding for raising the threshold would be more likely to go to more deprived areas.
Richard Humphries, a senior fellow at the King’s Fund thinktank, told LGC councils would have to get ready for a complicated process of putting the new system in place.
“There will be a lot of work in carrying out extra assessments and monitoring how much people are spending on their care”, he said. “The pressing issue now is whether councils will have the resources to do that.
“I suspect most councils know very little about their self-funding population, and that’s key”, he said. “If I were an adult services director I’d want to consider a local census to find out more about it.”
Mr Humphries also said it would be “foolish” for councils to think the new cap and its extra funding would give them any extra money or the flexibility to improve services.
“I don’t think [the cap] will have a big effect on joining up services or the more immediate funding pressures”, he said. “It would be foolish for councils to assume that there would be any money left over for them.”
Labour’s shadow health secretary, Andy Burnham, said in Parliament that Mr Hunt’s reforms were a “step forwards, but a faltering one”, adding that the cap was a “timid solution” to a social care crisis. Introducing a cap was only a partial solution, he said, because it did not address the crisis in councils’ social care budgets.
The Labour MP Pat Glass also challenged Mr Hunt over councils’ shrinking care budgets, saying this would “wipe out” any gains made from the introduction of a cap.
In response, Mr Hunt said the Department of Health had transferred £7.2bn from the NHS to councils’ care budgets. However, he added, council cuts were “something we’re watching very closely throughout the country.”
The Department of Health is due within the next two months to begin an “engagement” process with councils and other groups about how the reforms should be put in place, LGC understands.