The Government is seriously underestimating cost of Social Care reform according to report

On 18 May 2022, County Councils Network which is a body representing England’s local authorities, released a new independent report titled ‘Preparing for Reform’ report (“The Report”). The Report analysed aspects and costs of the Government’s planned social care reform. The Report estimates that the Government are ‘seriously underestimating’ the costs of its social care proposals by at least £854m a year. The effect of which means, that England’s largest councils and care providers could face widespread closures and a shortage of beds.

What are the new reforms?

The Government’s proposals for reform include a new and fairer means-test, including a £86,000 cap on care costs. In addition, the fair cost of care aims to enable people who arrange and fund their own care to be able to ask the local authority to do it on their behalf.

What the Report Says

The Report states that the cost of these reforms over ten years to 2032 could be roughly £10bn higher than originally estimated. As a result, it could require an additional 5,000 staff to carry out extra care and financial assessments under the reforms. Additionally, The Report estimated that the reforms will cost a minimum of £25.5bn spread over a decade, this is significantly higher than the Government’s current estimation of just £15.6bn.

It was noted that councils in rural England, particularly in the South, East and West of England, will amount to 64% of the total cost of the means test. Therefore, the cap on care costs over the next ten years could face a £7.6bn funding deficit. Furthermore, The Report estimated that the Government would need to spend half of the Health and Social Levy by 2032 on the current proposals, which have an annual cost of between £5.6bn-£6.2bn. The analysis provided in The Report stated that the levy would generate £12bn in annual revenue for health and social care but only £1.2bn has been promised in each of the next three years.

What has been said about the reform?

Currently, almost two-thirds of councils say they were ‘not well prepared’ for the reforms. This is due to funding shortfalls and the tight turnaround, with councils set to implement this by October 2023. As a result, two-thirds of councils are in favour of delaying key aspects of the reforms beyond next autumn. However, a Department of Health and Social Care spokesperson said:

“Modelling has been through extensive peer review and we are confident in the department’s estimate for charging reform. We’re working closely with local authorities, providers and care receivers to deliver a smooth national transition into the new system, including learning from our trailblazer local authorities.”

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