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Revisit Dilnot to avoid serious pitfalls

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The Dilnot report recommended that people funding their own residential care “…should contribute a standard amount to cover their general living costs, such as food and accommodation”.

It said this should be taken into account when councils calculated progress towards the proposed self-funding cost cap. An apparently sensible proposal, but one that, on closer inspection, could lead to potentially perverse outcomes.

The Department of Health has suggested that one of the key purposes of the contribution would be to ensure equality between people receiving home care and residential care. The logic being that people receiving care at home are still responsible for paying their housing and utility costs, which don’t count against the cost cap. Whereas, for those in residential care these costs are not separately identified from their care costs, and therefore could accelerate the pace at which the cost cap is reached.

It is proposed that the contribution from those in residential care should be about £12,000 a year, and a fixed amount across the country making it “…fair, simple and transparent”.

But, with the variation in living costs across the country, a flat rate could financially penalise people who stay in their own homes, especially in areas with high living costs such as London.

On average, living costs in London are estimated to be about £30,000 a year. So, people self-funding home care will, on average in London, be paying £30,000 of living costs, none of which will be counting towards the selffunding cost cap.

In addition, living costs in residential care in London are likely to be much higher than £12,000, meaning some of these costs will contribute towards the cap and a residential care user would reach the cap much faster and spend much less.

There are two worrying outcomes from all this. The first is that it could make residential care a quicker and cheaper way for self-funders to reach the cost cap than home care, potentially undermining the work local authorities are doing to keep people in their homes and give them independence. And the second, is that London’s boroughs, because of the impact of the higher cost of living, will become responsible for care costs sooner than in other parts of the country.

It seems to me that for the system to be truly “fair” for both care users and the taxpayer, the government should rethink its position. It should consider setting the contribution rate at a level that better reflects the true variation in the cost of living across the country, or ensure that the funding distribution is adjusted to reflect the variable impact across councils.

Hugh Grover, director of fair funding, performance and procurement, London Councils

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