The Department of Health has reversed its decision not to award extra Care Act funding to two councils after they mounted a legal challenge.
The government has confirmed it would seek a settlement with West Berkshire and Wokingham councils, after they two authorities won permission for a judicial review before the general election in May.
The review aimed to overturn the government’s decision not to award them extra funding to recognise that more people would be eligible for care following the introduction of the Care Act in April 2015.
Both authorities- and Northumberland CC - are the only ones in the country that restricted care to people with the highest – “critical” – levels of need under the old system.
The top level of need under the Care Act covers more people as it is roughly equivalent to the “critical” and “substantial” categories under the previous system.
The Department of Health and the two authorities have now agreed to independent monitoring of the councils’ costs since the introduction of the new Care Act thresholds.
The department will then reach a funding settlement with the two councils if the review finds a financial gap.
West Berkshire estimated it had a £3m gap between the cost of its Care Act duties in 2015-16 and the funding it gets from the government.
A paper written for Wokingham council’s cabinet forecasted that the shift in eligibility under the Care Act would cost the council an extra £200,000 in 2015-16, £1m in 2016-17 and £1.5m in 2017-18.
A DH spokesman said: “Ministers have decided to quash the original decision not to give the councils additional funding, and will work with the councils to identify any additional impact on them. Now that the Care Act has been implemented this can be based on the experience of transitioning to the national eligibility threshold.”
Nick Carter, chief executive of West Berkshire council, said: “We are very pleased. We had had to put a fair amount of our own resources and find additional savings to cover those costs in year. From our position it was a potentially unsustainable position to be in going forward.”
He said there was no detail yet about how any settlement might work or what period it might cover.
He hoped the review would be completed by October.
Andy Couldrick, chief executive of Wokingham council, said: “We will be working with the Department of Health to understand the impact to date and use that data to reach a reasonable settlement in terms of the on-going impact.”
He said the authority might need to make cuts to some of the community-based, preventative services it had created to serve vulnerable people who were not eligible for care under the old system. Some of these people would now be eligible for a personal budget under the Care Act and might not choose to spend it on those services.
He said: “We cannot both fund their support through personal budget and fund those preventative resources services in the community. So there is a transitional effect as we have to shift the balance of the way we fund. What we would hope is potential service users with a personal budget would buy that support. But what we cannot do is fund it twice. We have grown a vibrant voluntary and community sector supporting vulnerable and older people in Wokingham and we want to manage any transition in a way that does not lead to substantial disruption to that.”