Last Updated on July 27, 2018

The cap on care costs must be fully funded to avoid ‘catastrophic’ consequences for local services, councils say.

England’s largest councils have backed government plans to introduce a cap on care costs – but warn that it must be fully-funded otherwise it will inadvertently push services, care providers and councils closer to breaking point.

The recommendation for a fully-costed cap comes in a new report from the County Councils Network (CCN), ‘Sustainable Social Care: A Green Paper that Delivers a New Deal for Counties’, which sets out the CCN’s policy positions on adult social care, ahead of the forthcoming government green paper.

The report argues that if Government’s reform agenda is to be successful, then social care must remain a local service and ministers should ‘not be swayed’ by overly-simplistic arguments to combine all, or elements of, social care into the NHS.

With counties facing a funding gap of £1.6bn in social care by 2020/21 and new figures showing the average county authority now spends 45% of its entire budget on adult social care, the report makes several key recommendations to Government:

• If Government implements a cap on care costs at £50,000 per person, this could cost county authorities collectively £691m a year – double that of a £72,000 cap which was previously put forward.
• County leaders suggest these reforms, and the funding gap, could be filled by national taxation and means-testing of winter fuel allowance and attendance allowance to avoid ‘catastrophic consequences’ for local services. Separately, they say they agree with the exploration of further proposals to make the system sustainable, including the recent  ‘social care levy’ proposals.
• Social care must remain a local service, and social care councils’ roles in the reform and integration agenda should not be overlooked by Government.
• With the number of older households in county areas set to rise to ‘unprecedented’ levels, by 155% over the next two decades, Government must address shortages in both retirement properties and supported housing by introducing reforms to the planning system and to the administration of grant funding, such as Disabled Facilities Grants.
• Prevention should be a key focus of the Green Paper. To that end, Government should invest a ‘significant’ proportion of the £20bn NHS windfall in primary, community, and mental health services.

The Government had been poised to introduce a £72,000 cap in 2014 before it was postponed. The 2017 Conservative Manifesto dropped its commitment to the cap, but they have since restated their commitment to the policy and it is expected to form part of forthcoming proposals.

However, the lower the cap is set, the higher the costs for county authorities. The report argues that, with county authorities already facing an existing funding black hole of £949m in social care by 2020, and care home providers in these areas estimating a short-fall of £670m in the fees they receive from councils, the introduction of an un-costed cap would have ‘catastrophic’ consequences for local services. The report suggest that this would result in services being pushed closer to the brink, fewer residents actually receiving care, and care homes potentially closing.

These councils also say that a failure to fully fund the cap on care costs, and provide genuinely new money to meet the existing funding gap of £1bn, will further threaten the financial sustainability of England’s largest councils. A CCN survey of county leaders recently showed that only 33% of leaders were confident in delivering a balanced budget by 2020/21; with the outcome of the Green Paper pivotal to dealing with the financial uncertainty facing their councils.

In a CCN survey of county leaders undertaken to inform the report’s recommendations, social care cabinet members, or directors, have argued that increased national taxation should be part of the financial solution. The results found that 6% of respondents believe a national insurance rise would be ineffective; and 14% believed an increase in income tax would be ineffective.

Cllr David Williams, CCN's spokesman for health and social care and leader of Hertfordshire County Council, said, 'This report today sets out policy proposals for Government ahead of the social care Green Paper. The status quo is no longer an option; ministers must be bold in ensuring sustainable financial reform. With care services and the NHS interdependent, investing in one but not the other is financially irresponsible.'