The Fiscal Statement confirmed the rumours that, along with the NI Levy that was to pay for it, the social care cost cap plans have been delayed beyond the next election and the 2019 manifesto promise that ‘no one will have to sell their home to pay for care’, will have to have the words ‘at some point in the future – hopefully’, tagged on. While the Statement described this postponement as a ‘deferment’, I suspect that many of you won’t be surprised at this turn of events.
These have been described by the reforms author Sir Andrew Dilnot as ‘cruel, wrong, completely unacceptable and letting down some of the most vulnerable again’. For dither and delay has been the fate of so much social care reform. By successive Governments of every hue.
Some elements of the 2014 Care Act, even though on the Statute book, have still not been put in effect – so let’s hope this is just a delay and not a cancellation in lieu of further deliberation, consultation and consideration of yet another alternative plan.
In the Statement, saying correctly that councils had "very real concerns" about their ability to deliver them on time, the Chancellor, Jeremy Hunt, announced that the government's planned social care reforms, including the Care Cost Cap will be delayed for two years until 2025. Instead he will be re-allocating funding to allow local authorities to provide another 200,000 care packages.
It’s important to remember that only roughly a half of the current spend on social care goes on older people, the remainder goes to children and working age people.
The Chancellor, Jeremy Hunt, announced some additional funding and said that £1.3bn will be available in 2023-24 and £1.9bn in 2024-25 to spend on adults’ and children’s social care.
A further £1bn in grant funding would be made available for adults’ services in 2023-24 and £1.7bn in 2024-25.
Most of this will come via the Better Care Fund – the existing stream designed to support health and social care integration – to finance services to support hospital discharge, with the rest coming through a ring-fenced grant. In addition, local authorities will be able to increase council tax by a greater amount than previously permitted over the next two years without the need for approval through a referendum of local citizens. The permitted rise in the general rate will rise from 2% to 3%, while that for the adult social care precept – which provides ring-fenced funding for the sector – will increase from 1% to 2%.
There is not such good news from 2025 onwards, for which Hunt pencilled in increases in government spending of 1% a year in real terms, a much lower rate than has been the case since 2020. However, this will be implemented after the next election, and it is unclear what it means for local authorities and social care. He is also set to increase the NHS budget over the next two years by an extra £3.3 billion and in addition the NHS would publish an independently-verified plan for the number of doctors, nurses and other professionals needed in five, 10 and 15 years’ time.
It mustn’t be forgotten that these reforms were to be paid for by a 1.25% increase in National Insurance contributions, which was cancelled from 6th November, and was expected to raise £12bn a year. The charge was due to be replaced by a new hypothecated NI levy from April 2023, but this was cancelled by Liz Truss’s Government in September. It is therefore is no surprise, in the present dire economic climate, that without the funds to pay for them the reforms have been postponed. However the new funding is nowhere near the promised £12bn, which was the minimum that most informed commentators in the sector felt was required to rebuild it back to a satisfactory service level.
For in effect, with the accompanying inflation, these numbers represent an almost real-terms standstill in spending on public the NHS and for social care. We are starting from a low base of high waiting lists and stagnating services with demand growing strongly year-on-year. I don’t think it’s unfair to say that it’s hard to see how the quality of that service is going to dramatically improve.
Social care requires both significant structural reform and real long term financial investment, but it seems successive governments still see it through a 1948 lens as the poor relation of the NHS, deserving of only a succession of a financial sticking plasters.
At present we only know the headlines of the statement, but as more detail emerges, it will be essential that the Government ensures that the funding and support promised for councils actually reaches them, or we will continue to face a mounting social care crisis – especially with dementia support.
The announcements have had a lukewarm reception from the sector. In its response, think-tank The King’s Fund gave a qualified welcome to the adult social care funding boost, but criticised the delay to the funding reforms, on the grounds that deferring the cap would leave many people continuing to face unpredictable care costs. Meanwhile NHS Providers view was that while the extra cash for social care was welcome, the delay to the reforms was a “backwards step”.
Many commentators felt that the postponed care reforms were a crucial first step to tackle catastrophic care costs and limiting the amount people had to pay towards their care. But they were only a first step and not a substitute for proper reforms, including improving staffing numbers, training and terms and conditions, that ensure everyone who has care needs receives a prompt quality service, appropriate to their individual needs.
While the 2023 10.1% rise in pensions from the triple lock will be honoured, the IHT threshold is now frozen until 2028, which means potentially many more people, who may not consider themselves to be wealthy, will be facing an IHT bill and many self-funders may still face unsurmountable care costs. In the short term the care provision landscape will remain treacherous and the potential lack of available suitable caring provision in certain locales, whether in a domestic or residential situation, may mean that even self-funders, irrespective of their ability to pay, will find it increasingly hard to find the support they need – it simply may not be available at any price.
Quite where this leaves an adviser, who has correctly managed a client’s savings and investments to give them the capability in older age to fund any care need, should it arise, but now finds that the care required by their client simply cannot be sourced at any price, remains to be seen – not in a favourable light I fear with some very unhappy clients and their families!
As these new plans evolve SOLLA will make every attempt to influence them so to ensure more favourable outcomes for the key players – our clients and their families.
Author: Peter Barnett (Honorary Chair, SOLLA Advisory Board)