I wanted to take some time to talk about the government’s announcement in relation to future social care funding. I am going to try very hard to put my political views to one side here, and just give you a breakdown of what was announced, and what this means for social care in England.
The headline was, of course, the announcement of £5.4 billion additional funding for social care, through an increase in national insurance contributions. Additional funding is certainly welcome, and I confess that I have no idea if this announcement on its own would ‘fix’ the issues people are currently experiencing in the social care system. But it certainly can’t hurt.
The announcement also included continuation of Discharge to Assess funding for a further 6 months. I am not convinced that helps anything at all. But I’ve already made my views about the current Discharge to Assess model clear here. As a principle, I agree it could be helpful, but in practice it’s not being implemented very well in many areas.
But that aside, the additional funding is also coming with additional burdens for local authorities which may, or may not cancel out the financial benefit. I’m not here to do the maths on it, but let’s review the ways that local authorities will be required to spend more on social care.
1) The personal expense allowance and minimum income guarantee will increase from October 2023. I haven’t seen anything about what the new amounts will be. What this means is that people needing social care will be entitled to retain more of their income, and only income above the relevant amount will be taken into account by the local authority in their financial assessment. In all likelihood, however, the cost of the care will increase (or best case scenario, remain the same) so that means the local authority will have to pay more for each individual’s care.
2) The capital thresholds will change too, from October 2023. Currently, local authorities do not contribute financially to the care of individuals who have capital assets of more than £23,250. But under the new plans, they will be required to contribute to social care for anyone with capital assets of more than £100,000.
So we all pay tax so that the wealthy can stay wealthy. Under the current system, the local authority meets the full cost of an individual’s care when their assets are less than £14,250. But that threshold will increase to £20,000. Which means the very wealthy benefit more than the moderately wealthy, which isn’t suspicious at all.
3) The, previously abandoned, plans to introduce a cap on the maximum amount that individuals will be expected to pay for their care over their lifetimes will also be implemented. This means that no one will be expected to pay more than £86,000 in care fees. When someone’s total ‘care account’ reaches this amount, the local authority will be expected to fully fund their care. That means more people becoming eligible for local authority funding. It also means a significant burden for local authorities who will be required to keep track of the amount individuals pay towards their care, and in many cases, find a way to separate this out from non-care fees such as accommodation and food. That is going to be a significant administrative tasks, especially for individuals in residential care since that is currently a flat rate and not broken down in this way.
Because of this complicated financial breakdown, individuals may still need to sell their homes or enter into deferred payment agreements if they require long-term residential care. A fact which is not being widely publicised. I can’t imagine why…
4) section 18(3) Care Act 2014 is to be fully implemented. This means that the local authority will be required to arrange care and support for anyone over the financial threshold on request. So local authorities may find themselves asked to arrange care for individuals who might otherwise have made their own arrangements. They can charge an administrative fee for this though, which may cancel out the additional burden, or may not.
What local authorities have been wondering about this for some time, is whether in doing so, local authorities have to contract at their negotiated rate. Most legal thinking is that they do no HAVE to in order to comply with the legislation, but if they don’t they are likely to receive a lot of complaints. But if they do allow ‘self-funders’ to access their negotiated rates, the care market may well collapse, as it is no secret private fee payers are currently plugging gaps in funding caused by low local authority rates.
This might, of course, prove to be academic anyway because…
5) local authorities are going to be required to pay ‘fair rates’ for care. Now it remains to be seen who is calculating ‘fair rates’ and whether this will be a national standard or vary by area. I would be surprised if it is left to local authorities to decide what a ‘fair rate’ is, because they’ll probably say what they pay now is fair. One local authority I know have was absolutely adamant it was paying providers a fair rate, even whilst admitting that its own in-house provider could not provide the support needed at the ‘fair rate’. Given that third party providers are usually businesses and are entitled to make a profit, whilst an in-house provider is forbidden from making a profit, I don’t know how this ever made sense. But I digress.
What this means is that local authorities are very likely to be expected to pay more for care services than they are currently.
All of this does make me wonder if the additional money is really going to improve the health and care system in this country. Because it does look a bit like a good chunk of this money is going to be spent on ‘additional burdens’ coming from this new announcement. So I think its fair to say I won’t be getting too excited just yet!
In case it isn’t obvious from the fact I still haven’t identified the authority I used to work for, or the organisation I now work for, the views expressed on this blog are my own opinion and not the opinion of either that local authority or organisation