The man who first proposed a cap on adult social care costs has said he “particularly regrets” the latest “big changes” the government has made to its plans for social care reform, which he warned will “find savings exclusively from the less well off”.
Jessica Hill www.lgcplus.com
The amendments, which were published yesterday by the Department for Health and Social Care with no fanfare while the government was embroiled in the fiasco over MPs’ second jobs, means that those with fewer assets will be less likely to benefit from the cap.
When the £86,000 cap on the amount anyone would pay for social care was first announced in September, it was expected to include all care costs including means-tested council funding. But now, in a blow to those receiving government help towards their care costs via the means test, only private contributions will be counted.
The announcement is part of what is being viewed as a very complex and wide-ranging set of changes. The Local Government Association is expecting to work with the government in the near future to understand the implications of the overall package.
Commenting on the plans, Sally Warren, director of policy at The King’s Fund, tweeted yesterday: “With the new government model, the state still contributes if assets are less than £100,000 but the cap is set not on total care costs but on how much the individual spends. They would still need to spend £86,000. This is barely better than current system: maximum exposure is £86,000 versus £92,000 under the current system
“It is clear that those with under £106,000 do little better than under current system and a lot worse than under the Care Act [Dilnot proposals]. It’s only when you have more than £186,000 that the government system leaves you no worse off than the Care Act.”
Sir Andrew Dilnot, who first proposed a cap through the Dilnot Commission in 2011, told the Treasury Committee this morning he was “very disappointed” by the changes – which contrast with his own recommendations in 2015 that those who already have social care need should not be expected to make any contribution – effectively what he called a “zero” cap.
“Essentially what this change does is – for those who have long care journeys, significant care needs – [it] means the less well off will not gain any benefit from the cap,” he said.
“The only change as a result of all of these reforms will be that instead of running your assets down to your last £14,250, you’d run your assets down to your last £20,000.
“The people most harshly affected by this change will be those with assets of exactly £106,000 – that is, the £86,000 of cap plus £20,000 that is protected by the means tested system.”
Around 60% of old people who end up in adult social care have assets less than £186,000, and Mr Dilnot claimed all of this group “will do less well under what the government is proposing than under the proposals we made”.
“[The changes] find savings exclusively from the less well off group,” he said. “I regret the main parameters [of the reforms] and I particularly regret the announcement made yesterday which removes a central element of probativity which we did think was an important part of this structure.”
Mr Dilnot also highlighted a “north-south axis”, warning that areas with lower house prices such as Hull are likely to be hit hardest by the changes.
Caroline Abrahams, charity director at Age UK, shared this view. In a statement, she said: “It becomes clear that the cap will disproportionately benefit those living in the south rather than the north, where house prices are that much lower, flying in the face of the government’s ‘levelling up’ agenda.
Mr Dilnot said it was “unlikely to be a significant sum of money” that the Treasury will save through the latest changes, “which is partly what makes me regret the decision”.
But he conceded that the proposals “still take us to a better place than we are at the moment”.
“The cap is less generous than I wanted it to be and the outcome is a bit lower. But nonetheless it moves us from the world we are now, which is an entirely means tested regime which exposes the whole population to catastrophic costs, to for the first time a national risk pool for social care.”
At the committee session, Ms Warren echoed this sentiment, indicating that despite her reservations over the latest changes, the proposals are still “the right overall structure”.
But she cautioned that while the Dilnot Commission incorporated “a whole host of other recommendations”, the government’s own proposals do not. The Dilnot proposals included “the need for a public information campaign so individuals understood what their liabilities were to help them prepare”, she said, and “working with the financial services industry to make sure that different products would emerge to be able to support that individual”.
“We’ve not seen much information from the government on any of those wider set of things which are required to make the system work,” Ms Warren said. “Because if this is going to help people prepare, they need to know about it – it’s not something that they should just find out about as they get the care in.”
She also warned that the social care reforms are “building on an existing means tested system that has been underfunded for over a decade, and remains underfunded”.
“Andrew’s first report in 2011 talked about the importance of the first thing you do being to strengthen the foundations in the current system, then you make these changes to the structure. We’ve not seen that happening at the same time.”
She highlighted Age UK’s claim that as many as 1.5 million people have an unmet care need, and how the Association of Directors of Adult Social Services says £10bn a year is needed to stabilise the adult social care system, in addition to what the government has provided through the levy.
“The spending review has provided 1.8% a year spending power increase,” Ms Warren said. “Normally social care demographic pressures are around 1.82% a year. We’ve also then got additional cost pressures through the increase in national minimum wage, the increase in national insurance contributions and changes on things like energy costs, which we think means adult social care will need considerably more than the 1.8% its being provided.”
Ms Abrahams said the changes announced yesterday make “the overall scheme a lot less helpful to older people with modest assets than anyone had expected”.
“It waters down Sir Andrew Dilnot’s original proposal to save the government some money, but at the cost of protecting the finances of older home owners who are not terribly affluent if they need care for a long time.
“This feels like completely the wrong policy choice and we are extremely disappointed that the government has made it – and that it is only announcing it now, rather than two months ago when the prime minister set out his plan. Unfortunately, its impact is such that it is more than a mere ‘tweak’.”
Charles Tallack, assistant director of the REAL Centre at the Health Foundation, said: “While we support the government’s ambitions to reform social care and protect people from catastrophic care costs, these last-minute changes seem poorly conceived and are a step in the wrong direction.”