This briefing paper focuses on adult social care charging reform and builds on a discussion from a round table of local authority social care leaders who were brought together by CIPFA to discuss charging reform.
The main themes to arise from the discussion were:
- The financial impact of charging reform had been underestimated.
- Time to implement charging reforms.
- The delay to charging reform raises questions over whether the reforms will go ahead as planned.
As the only global body dedicated to public financial management, and with a focus on improving financial resilience in the public services, CIPFA considers it critical that the challenges of funding social care are clear and understood in order to inform the development of strategic and sustainable solutions. Given the many years in which action has been restricted to short-term fixes, such solutions are now more important than ever, and should lead to long-term, strategically informed, financially sustainable and equitable changes.
Later this year, CIPFA will release a further publication considering the implications of charging reform in greater depth.
From the report by the Royal Commission on Long-term Care in 1999, to the Dilnot Commission’s Fairer Care Funding in 2011, to Build Back Better: Our Plan for Health and Social Care in 2021, proposals have been made to make adult social care charging fairer and to end unpredictable and unlimited care costs.
The charging reforms introduced in Build Back Better: Our Plan for Health and Social Care, and expanded upon in the Autumn Budget and Spending Review 2021 and People at the Heart of Care: Adult Social Care Reform, can be split into four elements:
- a cap on personal care costs
- changes to the means test
- implementing Section 18(3) of the Care Act 2014
- fair cost of care and market sustainability.
These charging reforms were to be introduced in October 2023, with a small group of trailblazer authorities to introduce the first two elements of the reforms in January 2023.
The government announced in the Autumn Budget and Spending Review 2021 that £3.6bn would be provided over three years to fund the reforms. This figure included £1.4bn to support local authorities to move towards a fair cost of care and improve the sustainability of the provider market. A health and social care levy would contribute to funding the reforms.
In the Autumn Statement 2022, the Chancellor Jeremy Hunt announced that the cap on personal care costs and changes to the means test would be delayed until October 2025, but that elements of the fair cost of care and market sustainability reforms would still go ahead.
Some of the funding for the charging reforms has since been redirected to address current adult social care pressures, and the health and social care levy has been scrapped.
Adequate funding for charging reforms?
“The financial impact of charging reforms had been underappreciated.”
The group agreed that the financial impact of charging reforms on local authorities had been underappreciated. This view can also be seen in research carried out by the County Councils Network and Newton, who argued that the cost of the reforms could be at least £10bn higher than the £23.25bn figure over ten years that had been presented in the government’s social care charging reform impact assessment published in January 2022.
Each element of the charging reforms will bring greater costs to local authorities, and increasing costs without certainty of adequate funding at a time when the sector is in critical need of investment was noted as the “wrong approach”.
However, the burden of these extra costs needs to be balanced by the fact that the system is in desperate need for reform and there have been calls for decades to protect people from unpredictable and unlimited care costs.
Insufficient implementation time?
“We didn’t have the time to implement them properly.”
The social care leaders in attendance agreed that under original plans, there was not enough time to implement the charging reforms proposals properly given the concurrent pressures facing the sector as a result of the Health and Care Act 2022, preparing for the new local authority social care assurance programme, and the delivery issues relating to delayed discharge, assessment backlogs and workforce pressures.
This view reflects the widespread concerns the sector had voiced before the delay. For example, the Local Government Association had called for a short deferment to the care cost cap, changes to the means test thresholds and Section 18(3) of the Care Act but had called for the fair cost of care work to continue uninterrupted.
A director of finance said that it was a positive thing that the Department for Health and Social Care had listened to the concerns of the sector. From this perspective, the delay can be seen as the right decision, but commentators such as Age UK, the King’s Fund and the Health Foundation all expressed disappointment in the delays.
However, at a time when the social care sector is under pressure and workforce morale is low, attendees commented that staff motivation was made even worse, with a perceived waste of effort and resources spending time preparing for reforms that have now been pushed back. A Head of Commissioning noted that:
“Staff motivation took a knock, so we had to deal with picking people up from a lot of wasted effort.”
“We took on staff, we changed systems, all of that had to be paused,” a director of finance said.
Staff that were recruited to assist with implementing the reforms could now be redirected to other pressing matters. A Director of Adult Services commented:
“We're looking at how we can redeploy the staff that we recruited but that’s not a problem because, like everybody else, we’ve got lots of agency staff. The fact that we’ve recruited extra people is a positive thing.”
A perceived waste of time and resources needs to be balanced by the view that there was not enough time to implement the reforms properly.
An uncertain future?
“The reforms being delayed until 2025 raises all sorts of questions.”
The implementation date of October 2025 falls after the next general election, which raised questions regarding whether the reforms will actually go ahead as currently planned. As one chief executive put it:
“To implement the reforms properly, we need quite a long lead-in time and given that we don’t know that it is going to happen in 2025, we can’t really get on with starting that lead-in time. There is continuing uncertainty, which is unhelpful.”
That said, there is widespread recognition and long-term consensus that reform of social care is essential. All the major political parties have proposals for social care reform on their agendas, so it is likely that some form of reform will take place. It is vital that reform takes place to arrive at a long-term, sustainable and equitable solution to funding adult social care.
The way forward
Social care is arguably the highest risk in the budgets of local authorities with social care responsibilities because it comprises such a significant proportion of those budgets. Local authorities face the greatest challenge to their sustainability in living memory because of the wider economic and financial climate.
Rather than the recent short-term approaches to addressing crises in social care, it is vital that the government works closely with the whole sector to ensure proposed reforms lay the foundation for a fair and financially sustainable service, fit for the future.
Later this year, CIPFA will publish a detailed insight report that expands on this briefing paper, providing a deep dive into reforms to social care charging and building on our previous work in The Road to Reform.
Our Social Care Network will continue to deliver events exploring best practice, legislation and professional issues in adult and children’s services, including events focused on the reform agenda.
We will continue our calls as noted in Integrating Care: Policy, Principles and Practice for Places, for greater cross-government collaboration to better co-ordinate and align poliicy at national level.