Government announcement of social care funding reform

Following the Dilnot report, the Secretary of State, Jeremy Hunt, made a statement to the House of Commons on 11 February 2013, which set out the government's proposals for social care funding reform.

The following proposals were included in the announcement:

  • the introduction of a lifetime cap for care costs. The level of the cap was set at £75,000 (to be introduced in April 2017)
  • an increase in the value of assets an individual could hold before they would need to contribute to care costs from £23,250 to £123,000. (While the upper capital limit rose, the lower limit remained at £14,250, meaning that anyone with capital between those two limits would have to contribute from those assets – as well as their income – according to a sliding scale)
  • a commitment to work with the insurance sector to develop products to ensure people would be covered, and their assets protected in later life, should they develop a support need
  • the introduction of a national minimum eligibility threshold (from 2015) to ensure that eligibility levels across the country were consistent and fair.

Reaction

Andy Burnham, the Shadow Health Secretary, responded to the secretary of state's announcement by suggesting that the plans were 'modest' and, while they represented some progress, the government had not gone far enough, stating that:

  • the plans had failed the fairness test because the cap was too high and would not protect those who were in greater need of financial assistance
  • the reforms were only a partial solution, as they did not address the financial crisis faced by local authorities. Additionally, the cap did not include accommodation costs, which could be significant.

Plans brought forward

On 17 March 2013, ahead of his budget announcement on 20 March, Chancellor George Osborne announced that the cap on social care costs would be brought forward by a year to 2016 from 2017, with the cap being set at £72,000 rather than the £75,000 that was originally stated by the secretary of state for health.

Shadow Minister for Care and Older People Liz Kendall commented: 'George Osborne is still failing older people and their families. Today's minor adjustments to the government's plan will still leave far too many selling their homes to pay for care'.

Later developments

Eventually, the Care Act 2014 would legislate for the principle of a cap on care costs. However, in 2015, the government announced delays to implementing the cap and, ultimately, plans for a cap were scrapped

Source(s)

Secretary of State Rt Hon. Jeremy Hunt, MP.
Social Care Funding 11 Feb 2013; Column 592.
Hansard; 2013.

House of Commons.
House of Commons video; Monday 11 February 2013.
parliamentlive.tv; 2013.

BBC News.
Social care cost cap and flat-tier pension brought forward.
BBC; 2013.