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Still ducking the funding care question?

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The government has committed in principle to introducing the cap on care costs and the higher means-testing threshold proposed by the Dilnot Commission – but its funding “progress report” contains a bleak warning.

“There remain a number of important questions and trade-offs to be considered about how those principles could be applied to any reformed system,” it says, adding that these “have particular significance given the size of the structural deficit and the economic situation we face.”  

But what else have we learned from the publication of the social care white paper and the progress report on funding?

Will councils be funded for the new responsibilities outlined in the white paper?

Care services minister Paul Burstow has insisted that the Department of Health will fund any “new burdens,” and the progress report commits the government to funding universal deferred payment. However, the white paper introduces significant new requirements for councils, and when asked about funding for these, both Mr Burstow and Andrew Lansley have mentioned the £300m being transferred from the NHS. It raises the prospect that this money, which is intended to maintain and improve services, could have to be channelled into funding the new duties councils face.

Earlier this year the LGA published a checklist of criteria for success. Of these, the reforms are seen to have failed on three key criteria

How much would it cost?

The white paper’s main measure, the introduction of universal deferred payments, does not yet have a price tag because the level of interest that councils can charge has not been decided. Other measures in the white paper, some of which are outlined overleaf, add up to roughly £200m per year in extra costs for councils.

The Dilnot Commission estimated that its proposals would cost £3.6bn by 2025/26, but separate calculations by DH have placed the cost at £5bn by that date. This would mean a rise from 1.1% of GDP being spent on adult care to about 1.25%.

Do the white paper and progress report meet the sector’s expectations?

Earlier this year the LGA published a document outlining its hopes for reform, which included a checklist of criteria for success. Of these, the reforms are seen to have failed on three key criteria: providing stability, providing sufficient funding and offering a commitment to action. On other criteria, such as improving the individual’s experience of care and outlining a clear role for local government, the proposals are seen as a partial success.  

Is the government committed to a universal system?

No. The progress report suggests an “opt-in” system, in which people would pay a premium in order to be covered by the cap on care costs. It says the DH will “investigate voluntary as well as universal approaches.”

Will the white paper’s proposals lead to consistent levels of care across country?

Andrew Lansley is keen to remove the barriers that prevent people from moving to different local authority areas, but the new measures might not make this happen. The white paper says that, when a care user moves to a new area, the council must in the short term match the level of service they had previously received. However, the local authority can still reassess those needs and, if it is deemed appropriate, offer a different level of service. The introduction of a national minimum eligibility threshold may mitigate the effect of this.

Is the government planning to keep the cap in the £25,000 - £50,000 range proposed by Dilnot?

Unlikely. The progress report says that during consultations, it was “generally felt” that £25,000 “was unrealistic in the current fiscal environment, and that the cap could be set at the top of the [Dilnot] Commission’s range without undermining the benefits of the system.”

Some stakeholders, it says, “have suggested that even higher levels of cap (e.g. £75,000) should be considered, recognising that it may be necessary to reduce the cost of reform in order to get a cap in place, which they see as the ultimate goal.” Some suggested varying the level of the cap depending on an individual’s wealth or the part of the country they lived in.

It says representatives from the financial services industry “thought that a cap at the top end of the recommended range or higher would be appropriate.”

Would the cap rise?

It could do. The progress report weighs the “greater simplicity of setting the cap in cash terms when people enter care” against the “greater fairness of allowing it to rise.” There is also uncertainty about whether the cap would be retrospectively applied to those who have already started paying towards their care – although the DH says this would be a “difficult and bureaucratic exercise.”

Will the announcements made so far be enough to stimulate the insurance market?

The DH is hoping the national eligibility threshold will be a good starting-point, pointing out in its progress report that the financial services industry said this would “make it easier for people to plan and prepare.” Further talks with insurers are being planned, to discuss the level of cap that the market would want to see before insurance products became viable.

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