Care and Support Minister Alistair Burt announced earlier this month that the implementation of the £72,000 cap on care costs will be delayed until April 2020.
Limits on the amount an individual paid towards their care were due to come in to force in 2016 however ministers have now pushed back the plans amid fears from councils about how they would meet the costs.
Officials said the Government was still fully committed to introducing the cap within this Parliament but wanted to make sure it was feasible from the beginning.
The decision came after an LGA letter sent to health secretary Jeremy Hunt which said it would be “deeply damaging to press ahead with a costly and ambitious reform programme if the very foundations of the system we are reforming cannot be sustained.”
From April 2016, care costs for those over the age of 65 were to have been capped to £72,000 over the course of their lifetime, and the intended changes would have also meant councils could only reject cost coverage for people with assets above £118,000, instead of the existing £23,250 threshold.
This means more people would have to pay for their care, either rat home or in a care home, for 10% of these people costs can exceed £100,000.
Despite this, the changes initially intended for next April also projected a more generous system of state help.
In the letter to ministers, dated 1 July and signed by health and care chair Cllr Izzi Seccombe, the LGA called for “frank assessments of prioritisation” yet clarified that they were not asking for funding changes to be entirely suspended.
It said: “This means considering postponing new costly initiatives – even those we fully support – if that is the only way we can secure sufficient funding for mainstream social care services.
“We do believe that reforms can wait and that addressing the more pressing matter of funding for the system itself should be our shared priority.”
The cap was part of a series of changes being instigated under the 2014 Care Act as well as part of the Conservative Party’s manifesto.
Delaying the cap therefore represents a clear break from commitments outlined in the Tory election manifesto, despite the fact that ministers will now be able to inject as much as £2bn into social care in England.
The manifesto originally stated: “We will cap charges for residential social care from April 2016… so that no one has to sell their home. For the first time individual liabilities will be limited, giving everyone the peace of mind that they will receive the care they need and they will be protected from unlimited costs if they develop very serious care needs such as dementia.”
According to the government’s cost estimates, this decision will save £590m in 2016-17 and £2bn until the end of the austerity programme in 2019.
Izzi Seccombe welcomed the delay.
She said: “The announcement to delay the second phase of the Care Act is a positive recognition from government of what the LGA has been warning – that we cannot try and reform the way people pay for adult social care when the system itself is on such an unstable foundation.
“Local government was ready and able to implement the next phase of the Care Act – we have supported the need for reform to the way people pay for their care and still believe this to be necessary.
“In an ideal world, we would have funding for both the system and the reforms, but we have to be realistic about where scarce resources are needed most. Local authorities have already implemented phase one of the Care Act and if both the reforms and the care system were fully funded, we would not need to suggest a delay.
“Any money from delaying the reforms must be put back into adult social care services and support putting it on a sustainable footing. The funding gap in adult social care is growing by a minimum of £700 million a year and, whilst this will not cover the rapidly increasing care costs councils are facing, it will be better than to attempt to push forward with changes on shaky grounds.”
Caroline Abrahams, charity director for Age UK, said: “The Government is right to delay implementing the cap on care costs as the top priority must be to stop the social care system that millions of older people depend on from collapsing in its entirety.
“At the moment there are growing concerns that the social care system is in a cataclysmic state of decline and unsustainable on its current basis. From this point of view, introducing the care cap would have been a distraction.
“What matters now is that the Government grasps the scale of the galloping crisis in social care and uses the Spending Review to bring forward effective solutions, which must include significant investment to fill the funding gap that is at the heart of the system’s difficulties. The clock is ticking.
“Meanwhile, there is a continuing need to protect older people from the risk of endlessly spiralling care costs: that problem which the Dilnot Commission was convened to address has not gone away. However, the version of the cap the Government wanted to bring in was set too high. If there is to be a cap on costs in future, as Age UK hopes, it must be fit for purpose and worthy of the name.” Alex Edmans, Head of Retirement for Saga commented “Moving the goal posts by delaying the introduction of the care cap will come as a bitter disappointment for those already in receipt of care who will now have to pay an additional four year’s fees before their costs start to count towards the cap – meaning even fewer are likely to reach it within their lifetime.
“The delay is a further indication that Government are not putting enough aside to properly fund our ailing care system and that more people will end up spending significantly more on their care. Whilst the use of an immediate needs annuity could help limit how much of an individual’s estate is spent on care, this change makes clear that our care system is in crisis and that paying for care will, in many instances, remain the responsibility of the individual.
“We hope that this time is used to ensure that the reforms are properly funded and individuals already paying towards their care costs are not subject to further delays and crippling care costs.”