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Government urged to use care cap cash for social services

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Local authorities will lobby the government to put the £6bn saved by delaying the Care Act cost cap into adult social care.

Care minister Alistair Burt announced on Friday that he would delay the implementation of the cap on older people’s care costs until April 2020.

Alistair Burt

Alistair Burt

In a letter to the Local Government Association, he said the government would defer the implementation of the Care Act’s £72,000 cost cap, which should have begun next April.

The letter was a reply to the chair of the LGA’s wellbeing board, Izzi Seccombe (Con), who had written to health secretary Jeremy Hunt and chancellor George Osborne earlier this month to ask them to delay implementation of the cap because of the funding crisis in social care.

Both the LGA and the Association of Directors of Adult Social Services said the £6bn that would have been spent by central government on implementing the care cap over the next five years should be put into adult social care.

Cllr Seccombe said: “Any money from delaying the reforms must be put back into adult social care services and support putting it on a sustainable footing. The funding gap in adult social care is growing by a minimum of £700m a year, and while this will not cover the rapidly increasing care costs councils are facing, it will be better than to attempt to push forward with changes on shaky grounds.”

She added that “in an ideal world we would have funding for both the system and the reforms”.

Harold Bodmer, Adass vice-president, said: “The important issue now must be to ensure that current services can benefit from the extra funding this decision makes available. This ought to be the beginning of a thoroughgoing, transparent process, through the coming spending review, of putting fair, equitable and fully-funded social care services back on track after what have been five devastating years.”

In his letter to the LGA Mr Burt said the care cap proposals were “expected to add £6bn to public sector spending over the next five years” and that a time of “consolidation” was the wrong time to implement “expensive new commitments such as this, especially when there are no indications the private insurance market will develop as expected”.

He said the government would also defer the implementation of the duty on councils to meet the eligible needs of self-funders in care homes until April 2020. Research for the County Councils Network found this could have added £1bn to councils spend on care homes by the end of the decade.

Mr Burt said he would also delay the proposed appeals system for care and support so that it could be considered in the spending review.

He also said he would hold an urgent meeting during the summer with the Treasury and figures from the insurance industry on the impact of the announcement and how government could help them develop new products to deal with care costs.

He wrote: “For example, the new pension flexibilities that were introduced in April create a real opportunity for us to work with the financial sector to look at what new products may be developed, thereby creating even more choice, and this is something I am keen to explore. To this end I will be holding an urgent meeting with representatives from the insurance industry along with HM Treasury and other government ministers to work through what this announcement means for them and how government can help them to bring forward new products. These discussions will continue over the summer.”

Progress on developing insurance products to cover care costs up to the cap is understood to have been slower than hoped.

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