Planned reforms to social care funding
Details
Part One: an “at a glance” overview
Ben Troke (Partner) and Paul Appleton (Senior Associate) attended the recent Laing Buisson Social Care Conference. A key area of concern for the delegates (which included a wide range of social care organisations, including providers and funders) was the Government’s planned reforms to social care funding.
We set out below a summary of the main proposed reforms. We will look at their impact in more detail in subsequent editions of this newsletter.
What changes are planned?
• A personal care fees cap: from October 2023, there will be an £86,000 cap on the amount any individual will need to spend on their eligible personal care and support needs over their lifetime (the eligibility criteria continue to be those set out in the Care Act 2014). Once that cap has been reached, the Local Authority will be responsible for funding services for that individual’s eligible needs.
Only amounts paid by the individual towards the cost of their eligible care and support needs count towards the cap. Daily living costs (so called “hotel costs”, such as rent, food and utility bills) will not count. The amount of daily living costs to be discounted from fees for those in care homes is set at a national, notional amount of £200 per week (at 2021/22 prices). The cost of additional/extra/enhanced services will also not count towards the cap, and we anticipate providers will “unbundle” their pricing structures to further separate personal care and support costs from other costs.
• Changes to financial limits: the financial limits for local authority assistance with an individual’s care costs are changing:
| Currently | From October 2023 | |
|---|---|---|
Lower limit: If an individual has assets below this level the local authority will fully fund their care. | £14,250.00 | £20,000.00 |
Upper limit: If an individual has assets above this level the local authority will not contribute towards the cost of their care. | £23,250.00 | £100,000.00 |
| For those with assets between the lower and upper limit, the local authority will continue to make a means-tested financial contribution towards the cost of an individual’s care. | ||
• Rollout of section 18(3) of the Care Act 2014 to care home placements: This will enable self-funders to ask their local authority to organise their care in a care home, allowing individuals to take advantage of the local authority’s agreed fee rates which are normally much lower than self-funder fee rates.
Currently, many providers use the higher self-funder rate to subsidise the cost of local authority funded residents, with local authority rates often considered insufficient/unsustainable. There is widespread concern amongst providers that this proposed reform risks destabilising a common operating model, will negatively impact provider finances and may undermine the ongoing fair cost of care exercise (see below).
Also, the estimate is that this aspect will require another 105,000 Care Act assessments per annum, adding to the burden already on social workers.
• Fair cost of care exercise: As stated above, providers often report that local authority rates are insufficient and unsustainable, and that they are below the actual cost of care. This is despite local authorities having a duty to promote a high quality, sustainable, efficient and effective market for care and support services. The Government has established a Market Sustainability and Fair Cost of Care Fund, which is intended to support local authorities to prepare for reform, and to enable them to start paying providers a fairer cost of care. To be eligible for funding, local authorities must engage with providers, complete a cost of care exercise and complete a market sustainability plan.
Whilst there is, of course, support amongst providers for additional funding and a move towards a fairer, more sustainable market, there are widespread concerns amongst providers that the amount of the Fund falls far short of what is required to achieve its purpose.
Next Steps
We will discuss the practical impact of these proposed reforms in greater detail in the next newsletter. In the meantime, we recommend social care providers take the following steps:
- Raise awareness of the proposed reforms within your organisations: start to consider their impact and potential opportunities.
- Engage with local authorities (and other funders) openly and transparently regarding the cost of care, including as part of the fair cost of care exercise.
- If you would like further information, please do not hesitate to get in touch with one of our specialist lawyers.
