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The news is rife with concerns over the delay on the introduction of the ‘cap’ on care costs under the Care Act 2014 reforms, which was supposed to come into effect next April. Not surprisingly, a number of organisations have been quick to express either their concern or praise for the postponement of the cap until 2020. 

Arguably, the cap is the single most impactful reform under the Act, but what does its delay mean for social care and why has it happened?

To the general public watching the news, there’s a perception, wrongly or rightly, that a cap on care costs would be limited to £72,000 under the proposed reforms. This is in terms of how much an individual would pay towards their social care in the future. 

Expectations of introducing the cap

Firstly, let’s take a look at why the cap was introduced by the government. The Dilnot Commission, that was set up to review the funding of adult social care, reasoned that given the unpredictability of care costs it would be intangible to expect the general public to know how much they would have to pay. The reform was, and still is, expected to change the way the public think about their care costs and provide an ‘incentive’ to self-address their future requirements. The intention was to also create the emergence of a raft of insurance products that would protect people up to the maximum value they would need to contribute. 

Debate over the ‘true’ cost of care before the cap

But therein lays the problem. The proposed cap of £72,000 really refers to specific care costs of a person being charged the local authority tariff in a private care home and not what self-funding people would usually pay. In other words, under the proposals (as they were) if somebody was assessed by a local authority as needing to be in a care home, those initially self-funding their care would find they would only be able to count what it would cost the local authority and not what the actual cost was to them. Additionally, and something that’s been flagged in the media, is that the cap discounts general living expenses too.

According to the Institute and Faculty of Actuaries (IFoA), the amount a person would spend is more likely to be £140,000 before hitting the cap. This of course is an incredibly variable figure – it’s no wonder then that we’ve not seen much in the way of proposed insurance products. 

It is, of course understandably frustrating for those needing or approaching a time when they might require such care.  

Local government responses

It is easy to see why local authorities are predominantly in favour of the postponement. For a start, there are a number of quite serious issues that need to be addressed, not least to do with saving any confusion as to how the cap is accounted for.
Moreover, it would in the short to medium term have required local authorities to spend a lot more on care without being given additional funding to do so. 

By the government’s own estimation, up to 460,000 people who would have been funding their own care would have come forward for having their care spending assessed in order to progress towards the cap. 

The impending introduction of the enhanced National Living Wage has of course played a role, as it will have a direct and noticeable impact on care home running costs and in turn, social care budgets. 

Cllr Izzi Seccombe, who is Chairman of the Local Government Association’s community wellbeing board, is reported to have said that “we have supported the need for reform to the way people pay for their care...but we have to be realistic about where scarce resources are needed most.”

Responses have naturally varied across the social care and charitable sector though. 

The Care and Support Alliance, which represents 80 care charities, praised the government’s decision to postpone the cap in order to firstly address current “underfunding” in the social care system. 

For those charitable organisations representing people with long-term illnesses such as dementia, the news has been seen as a blow, although there is a general consensus that underfunding must be addressed to protect frontline social care services. 

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