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Shelving the care cap will lead to an increase in fees

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The government’s decision to delay the imposition of a cap on an individual’s lifetime care costs suggests alarm bells are ringing somewhere in Whitehall.

Until now it has been possible for ministers to argue that councils can cope with cuts to their funding by making ‘efficiency savings’.

Insofar as there were such savings to be made, it appears that the government thinks that, at least as far as adult care is concerned, enough is enough.

The Chartered Institute of Public Finance & Accountancy has calculated that real terms local government spending has fallen by 32% since 2010, with adult social care not spared the cuts.

Against this background, the imposition of the lifetime care cap would have bitten deeply into the dwindling resources available for older people’s care.

With demand rising as the number of over-75s increases sharply, the government must have decided it had to abandon the policy, at least temporarily.

With the NHS, international development, pensions, schools and now defence all ringfenced, the government may have begun to realise that bad consequences are just around the corner.

The care costs cap would, if introduced, have led to dramatic further cuts in eligibility. Court challenges would surely have followed.

Ministers have decided that the embarrassment of dropping the care cap will be less difficult than facing a growing number of court victories over council decisions about care.

With the spending review approaching, it will be fascinating to see how far chancellor George Osborne can offer local government anything more than a slightly less severe downward path to a much smaller version of itself.

All of this raises the question why the government cannot bring itself to tell the public that as we move towards the ’36% State’ we can no longer have all the railways, pensions and health services enjoyed in, say, high-tax France. 

Older people’s payments for care will continue as at present.

In effect, service charges will remain in place. We can expect to see many more fees and charges for public services in the coming years.

It is inevitable: if taxes cannot go up but people want public services, direct payments will be the only way to protect provision. 

Tony Travers, director, Greater London Group, London School of Economics

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