Govt to hand councils £1.5bn for social care

Govt to hand councils £1.5bn for social care

The Chancellor of the Exchequer has promised local authorities £1.5bn in extra funding for social care, as he hinted further reforms would be announced "in due course".

In his spending review today (September 4) in Parliament, Sajid Javid pledged local government authorities will receive £1bn through a new grant and £500m through the adult social care precept.

The Chancellor said prime minister Boris Johnson “has committed to a clear plan to fix social care, and give every older person the dignity and security they deserve”.

He added: “Alongside the largest increase in local government spending power since 2010, and on top of the existing £2.5bn of social care grants, that’s a solid foundation to protect the stability of the system next year, and a down payment on the more fundamental reforms the Prime Minister will set out in due course.”

The Chancellor didn’t make any further reference to the social care green paper however, which was originally expected in summer 2018 but has faced several delays.

Several solutions for the care funding problem are said to be on the table, including the ‘Care Isa’ – a capped savings product, exempt from inheritance tax – and a 'care pension', which mixes drawdown and care insurance.

Steven Cameron, pensions director at Aegon, noted that while local councils would welcome the £1.5bn boost in the coming fiscal year, “this is a temporary stop gap, falling far short of the £8bn the House of Lords reported was needed to restore services to 2009/10 levels”.

He added: “But as the chancellor admitted, this ‘down payment’ doesn’t in any way reduce the critical need for a fundamental review.

“The scale of the issue is more heart surgery than sticking plaster. We need to arrive at a new, fair and sustainable deal on social care funding which will allow people to understand and plan ahead for their contribution should they need care.

“Fixing this huge problem area must be a priority for government and the millions of families awaiting a new deal while struggling week by week to provide care and dignity to elderly relatives.”

It is estimated just 12 per cent of adults aged 55 or over are currently putting aside money to pay for social care later in life.

Former prime minister David Cameron had promised to implement a cap on the cost of care of £72,500, which was supposed to come into effect in April 2016.

But in 2015 the government pushed this back to 2020, because it would have added £6bn to public sector spending at a "time of consolidation".

In December 2017, the government confirmed the proposed cap would be scrapped while a green paper on long-term reform was put together.

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