The government is delaying implementing its cap on long-term care until 2020, as it is too expensive, a letter sent by Alistair Burt, MP for community and social care, has revealed.
The £72,000 care cap was set to be introduced in April 2016, however this will now be delayed by four years.
A letter sent by Mr Burt to councillor Izzi Seccombe, chair of the Local Government Association, dated today (17 July) said: “The proposals to cap care costs and create a supporting private insurance market were expected to add £6bn to public sector spending over the next five 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.”
The letter adds that it has taken the “difficult decision” to delay the introduction, however this is “not a decision that has been taken lightly”.
The letter also confirmed the delay of the full introduction of the duty on local authorities under the Care Act to meet the eligible needs of self-funders in care homes until April 2020 as well.
“The consultation earlier this year highlighted significant concerns about this provision and the extra time will enable us to better understand the potential impact on the care market and the interaction with the cap on care costs system.
“We will also now defer the introduction of the proposed appeals system for care and support to enable it to be considered as part of the wider Spending Review that will launch shortly.”
The letter said that concerns were raised by the Local Government Association as well as the National Audit Office which highlighted concerns around the timetable for delivery.
The letter said: “And we will not be complacent: we will work hard to use this additional time to ensure that everyone is ready to introduce the new system.
“It will also provide an opportunity for us to continue to work together to consider what else we might do to support people to prepare for later life, including the risk of needing care and support.
“For example, the new pension flexibilities that were introduced in April create a real opportunity for us to work with the financial sector to look at what new products may be developed, thereby creating even more choice, and this is something I am keen to explore.”
Mr Burt added that he 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,” the letter added.
Jim Boyd, director of corporate affairs at Partnership, said: “With an estimated 150,000 people entering care each year, the introduction of the Care Bill was supposed to provide them with a consistent framework in which to make concrete plans around care funding.
“The delay of the introduction of the ‘care cap’ to 2020 will therefore be a blow to them and their families who will need to continue to pay an average of £28,600 per year.
“However, this will come as a huge relief for the local authorities who are reeling under the impact of budget cuts and already face a significant demand for care needs assessments.
“At a time of fiscal constraint it is not surprising that this expensive proposal has been delayed but the risk is that it may well disappear which may create further uncertainty.”
donia.o’loughlin@ft.com
