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Into Perspective: The Dilnot Cap
What reform is needed if it’s to benefit wider society?

On Monday 4th July 2011, the Commission on Funding of Care and Support (the Dilnot Commission), chaired by economist Andrew Dilnot, shared its recommendations on the future funding of care and support. Proposals including a more generous means-testing threshold and a lifetime cap on care costs were warmly welcomed across the political spectrum at the time, but ultimately failed to spark much needed reform.

Today, the sector is still waiting for such reform and the once prized ‘Dilnot cap’ has become increasingly criticised for serving mainly wealthy older people in practice. Social care craves reform, but what must change for the Dilnot cap to become our best foot forward?

The basics

The Dilnot Commission proposed four recommendations to reform the funding of care and support in England, two of which have gained the most notoriety. The first involved increasing the threshold at which older people would become responsible for paying their care costs themselves, from £23,250 to £100,000. On paper, this means that more people would become eligible for state support – those with savings between £14,250 and £100,000 would contribute an amount towards the cost of care, with the state also contributing. People who have more than £100,000 would have to pay for their care in full up to a limit, or until their funds deplete below the means test threshold.

The second proposal relates to a lifetime cap on care costs, specifically £35,000. Once someone has contributed this much of their own money towards the cost of their care, the state will step in and cover all ongoing care costs. For people already living in residential care, their ongoing living costs would be capped at an amount between £7,000 and £10,000 per year.

The problem

The main issue damaging the universal benefits proposed by the Dilnot cap involves money, as is so often the case when social care reform is on the table. In the current climate, many consider the proposals to be ‘hugely costly, highly inequitable, and would do little to address the current difficulties faced by older people in accessing publicly funded social care’, according to the London School of Economics.

Furthermore, it has been known since the birth of the Dilnot cap that in order for the changes to the funding system to be implemented (cap on individual contributions to be set at £35,000), £1.7bn in additional public expenditure would be required, escalating to £3.6bn by 2025/26, according to The King’s Fund. In addition, there is the widely held understanding that further public funding would be necessary to ensure that the current means-tested system is up to speed alongside the Dilnot Commission’s new proposals. Given Government’s historically ineffective approach to much-needed financial support for the existing system, it is understandable that scepticism within the sector is continuing to halt the development of the proposals towards benefitting wider society and invite criticism of its makers and Government.

The solution?

As each day passes the need for social care reform grows more urgent. While most would endorse the fundamental purpose of the Dilton Commission’s proposals, to cap the amount people pay towards their lifetime care costs and introduce more standardised eligibility for social care, there are clear weaknesses that prevent the proposal from benefitting wider society at this time, particularly those relating to the sector’s increasing funding gap. Some have suggested increasing the lifetime care cost cap from £35,000 to £50,000 – arguing that greater public spending on ensuring publicly funded social care eligibility for the least well off in society is as wide as possible, is a starting point.

We must be bold to reform social care

The Queen’s Speech last month confirmed the Government will bring forward its proposals on the future of adult social care this year. It will be interesting to see how Government define the scope of ‘reform’. In our own work, and that of partners, several key priorities surface time and again. Action on these would help deliver on a vision of care and support that is more preventative, person-centred, accessible and high quality, all underpinned by a properly resourced and valued care workforce that works in a way which complements people’s own skills and abilities.

Alongside these changes, there is also a need to prevent people from facing ‘catastrophic costs.’ Part two of the Care Act, otherwise known as the ‘Dilnot reforms’, seek to address this by capping the costs of care people face. These reforms would help tackle one dimension of the ‘fairness’ issue, but they do not deliver extra resources to meet unmet or under-met need or realise the legislation’s ambition on prevention. This, of course, carries a cost.

It is clear that more funding is needed to achieve our ambition, as outlined above. The current system draws funding mostly from council tax and business rates, as well as other sources such as Government grants and people’s own contributions. Council tax and business rates are not the right taxes to meet the forward growth in adult social care needs and costs – these are national-level entitlements that shouldn’t be funded by local taxes. The system is also means tested, which does not allow for the pooling of the risk to individuals of having to fund very high-cost care.

Designed carefully and over a period of time, a new or supplementary system of funding which pools risk could address both the issue of the funding shortfall and provide people with certainty that they would not face catastrophic costs of care by sharing that risk across the population.

A new source of funding that incorporates risk pooling is vital to the reform agenda. That is why we suggest the Government should make the case for increases in national taxation and/or a social care premium. We need to be bold in redesigning the function, form and funding of adult social care and support.

Cllr David Fothergill, Chairman of the Local Government Association’s Community, Wellbeing Board

Current system is deeply unfair

Boris Johnson’s pledge to ‘fix social care once and for all’ in 2019 was universally welcomed. However, introducing the decade old Dilnot Cap without addressing wider social care reform and chronic underfunding poses yet another existential threat to social care.

Social care is a neglected policy area and the funding crisis is getting worse each year. Local authority resources have not grown at the same rate as the ageing population; more people are requesting social care and less are receiving it.

The cap alone promises no extra funds for social care. It is expensive, inequitable, does not help those who struggle to access social care, nor does it improve the quality of care or enhance lives.

This regressive policy will protect the inheritance of the wealthy, whilst leaving thousands of British people without substantial savings in the same position they are in today: having to sell their homes to pay for social care. The cap will take money out of the social care system, posing a risk to quality and potentially causing a further restriction in eligibility for state funded care increasing injustice for working-age disabled people and older people.

Rather than injecting extra funds to address the social care crisis – Dilnot argues that private insurance providers will step in with citizens buying insurance products to cover themselves for the risk of accruing social care costs up to the level of the cap. But again, it is the people who need it the most that are least able to afford private insurance.

It is true that the current system is deeply unfair, but as a country we must do better than this. This affects all of us as we, or our loved ones, will likely need social care at some point. Without additional reform, the cap will benefit the wealthy, disadvantage the poor and do nothing to promote better quality care through better training, pay, and conditions for staff. An injection of additional public funding is urgently needed if Johnson is to keep his promise. Fixing social care is not the same as not having to sell your home to pay for it.

Kari Gerstheimer, CEO and Founder of Access Social Care


About David Fothergill

Cllr David Fothergill is a Health and Social Care Spokesperson for the County Councils Network. David has a wide range of operational experience including manufacturing, Children’s Homes and Older P…

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eople care. Most recently, he has been Director of HR for a large South West employer operating across 43 sites. Before becoming Leader of the County Council in May 2017, David served two years as Cha irman of and a further two years as Cabinet Member.

About Kari Gerstheimer

Kari Gerstheimer, Chief Executive and Founder of Access Social Care. Kari studied law at Edinburgh University, qualified as a solicitor in 2003 and has an LLM in human rights law. Kari has worked in t…

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he charitable sector since 2006 and set up a beneficiary facing legal department at Sense, before moving to Mencap with her legal team in 2017. Kari incubated the Legal Network within Mencap before se tting up Access Social Care as an independent charity in 2020.

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