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Cap on Care Costs

Statement made on 17 July 2015

Statement UIN HLWS135

Statement

In 2010 the previous Government asked Sir Andrew Dilnot to lead the Commission on Funding of Care and Support to make recommendations on how to achieve an affordable and sustainable funding system for care and support for all adults in England. The Commission recommended the creation of a cap system to protect people from the risk of very high care costs. This recommendation was accepted and plans put in place to implement from April 2016.

This Government still accepts that recommendation and remains firmly committed to delivering this historic change. However, the proposals to cap care costs and create a supporting private insurance market were expected to add £6 billion to public sector spending over the next 5 years. A time of consolidation is not the right moment to be implementing expensive new commitments such as this, especially when there are no indications the private insurance market will develop as expected. Therefore in light of genuine concerns raised by stakeholders, we have taken the difficult decision to delay the introduction of the cap on care costs system until April 2020.

This is not a decision that has been taken lightly. A letter from the Local Government Association, dated 1 July, was clear that we need to think carefully about all the options, including postponing new initiatives. I am attaching a copy of this letter and a response from the Minister of State for Care Services. This is therefore what we will do and further announcements will follow in due course. Furthermore, we will continue with other efforts to support social care, in particular through the Better Care Fund, which will drive the integration of social care and the NHS going forward.

We have an ageing population, which is something to be celebrated, but it inevitably means there are more people who will need care and support and we must ensure that the system can respond. This is an issue that had been ignored by successive Governments for far too long and I remain proud that we are taking on this thorny issue and setting out clear plans to address it.

Vital steps have already been taken to improve the care and support landscape. The first phase of the care and support reforms enshrined in the Care Act came into force in April this year, introducing the biggest reforms to care and support in over 65 years. For the first time ever, we have a single, modern legal framework for care and support that places the person and their health and wellbeing at its heart. There are now national eligibility criteria for care and support across England. Carers now have the right to support to meet their needs. And deferred payment agreements are available across England ensuring that people should not be forced to sell their home in order to pay for their care in their lifetime.

The introduction of the cap on care costs system will be the biggest reform to how care is paid for since 1948 and we must ensure that the new system works from day one. Local authorities and partners have consistently warned us of the risks of implementing this too quickly. We will therefore not be complacent, but work hard to use this additional time to ensure that everyone is ready to introduce the new system and that people can understand what it will mean for them. This includes taking the time to take stock on some of the other elements of the care and support reforms that are intended to support the cap system.

I am able to confirm that we will delay the full introduction of the duty under Section 18(3) of the Care Act on local authorities to meet the eligible needs of self-funders in care homes to April 2020 to allow more time to be taken to consider the potential impact on the market and the interaction with the cap on care costs system. I can also confirm that the proposed appeals system for care and support will now be considered as part of the wider Spending Review. Further announcements will follow in due course.

We will also look at what more we can do to support people with the costs of care. The new pension flexibilities introduced in April create a real opportunity for us to continue to work with the financial sector to look at what other products may be created to help people meet the costs of care, creating even more choice and enabling people to better plan and prepare for later life. To this end I will be holding an urgent meeting with representatives from the insurance industry along with HM Treasury and other Government Ministers to work through what this announcement means for them and how Government can help them to bring forward new products. These discussions will continue over the summer.

Statement from

Department of Health and Social Care

Linked statements

This statement has also been made in the House of Commons

Department of Health
Cap on Care Costs
Alistair Burt
Minister of State for Community and Social Care
Conservative, North East Bedfordshire
Statement made 20 July 2015
HCWS145
Commons