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On 7 September 2021, the Prime Minister announced plans to reform how people pay for adult social care in England, which will be funded through a new Health and Social Care Levy. The proposed reforms will be supported by an investment of £5.4 billion over the next three years.

This briefing provides information on the proposals for adult social care, the details of which are set out in the Government policy paper: Build Back Better: Our plan for health and social care.

Further information on the proposed proposed new Levy is available in a separate Library briefing: Health and Social Care Levy Bill 2021-22, CBP9310, 10 September 2021.

Adult social care funding pressures

Adult social care funding has been under pressure for several years and it is argued that this has contributed to a wide range of issues, including:

  • Increasing numbers of people not having their care needs met.
  • People not eligible for local authority support facing potentially “catastrophic” care costs of over £100,000, which they may have to sell their home to pay.
  • The financial sustainability of care providers.
  • Impact on health services, including delayed hospital discharges and unnecessary attendances at A&E.
  • Workforce issues, with over 100,000 vacancies, and poor pay and employment conditions.

Past reform proposals

Reforming adult social care funding, including how people pay for care, has been an issue for successive governments and a number of proposals for reform have been made. This includes the 2011 Dilnot Commission, which, among other things, recommended a lifetime cap on personal care costs of £35,000 for people aged over 65, and a more generous social care means test.

The Coalition Government accepted the Dilnot Commission’s proposals in principle, although it altered the parameters for the cap (eg setting it at £72,000) and the means-test as well as some of the detailed policy behind the cap.

The Government initially set an implementation date of April 2016 for the reforms and the Care Act 2014 provided the legislative framework for a cap on care charges. However, implementation was delayed until April 2020 and then effectively indefinitely postponed.

In its manifesto for the 2019 general election, the Conservative Party said it would seek a cross-party consensus for proposals to reform how people pay for adult social care. It added that a prerequisite of the proposals would be that “no one needing care has to sell their home to pay for it.” The Government originally said that the plan would be published in 2020, but this was put back to 2021 in light of the Covid-19 pandemic.

The proposed reforms

From October 2023, the Government plans to introduce a new £86,000 cap on the amount anyone in England will have to spend on their personal care over their lifetime. The cap will apply irrespective of a person’s age or income.

It is expected that the cap will be based on the framework provided for by the Care Act 2014. Under this framework, only money spent on meeting a person’s personal care needs count towards the cap. Spending on daily living costs (or what are commonly referred to as “hotel costs” in a care home) do not count towards the cap.

In addition, from October 2023, the Government proposes to make the means test for accessing local authority funding support more generous. This includes increasing the upper capital limit (the threshold above which somebody is not eligible for local authority support towards their social care costs) from £23,250 to £100,000.

The policy paper also sets out a number of other proposed changes to how people pay for social care, and says that that the Government will publish a white paper on adult social care later in 2021, focusing on wider system reform.

The Government will also invest at least £500 million in measures over three years to provide support in professionalising and developing the social care workforce; fund mental health wellbeing resources; and improve recruitment and support.

Reaction and comment

The proposed reforms to the social care charging framework, including the introduction of the cap and the changes to the capital limits, received a broad welcome from a number of stakeholders. However, it has also been suggested that the reforms may “not live up to their marketing” and that the cap will “help relatively few people.”

Much of the stakeholder commentary has focused on the broader funding of adult social care and, in particular, on whether the additional funding will be sufficient to address wider issues in the sector. They’ve highlighted challenges associated with transferring revenue raised by the new levy from the NHS to social care in future years, pointing out that there is no precedent for this.

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