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Written Statement - Paying for Social Care – Update  

Gwenda Thomas, Deputy Minister for Social Services

On 11 February the UK Government announced that it intended to act on the recommendations of the Commission on Funding of Care and Support in England, chaired by Andrew Dilnot.

This was a long-awaited announcement and I welcome it to the extent that it gives some clarity about the UK Government’s intentions to introduce new arrangements for England.  The announcement was updated this week by the Chancellor of the Exchequer so that the key features of the proposals for England are:

  • A cap on an individual’s lifetime care costs of £72,000 (with the costs associated with accommodation in residential care standardised at a maximum of £12,000 per year, across England);
  • A lower rate of cap for people who develop care and support needs prior to reaching retirement age, with a zero rate for young people who have care and support needs by the time they turn 18; and,
  • An uplift of the capital limits for the means test in residential care from £23,250 to £118,000, with the UK Government paying a proportion of these individuals’ residential care costs on a sliding scale (on a similar basis to the current “tariff” system in operation in England).

I understand that the UK Government intends that these arrangements for England should be implemented from April 2016, with a new universal scheme to offer people in England deferred payments coming into operation from 2015. These reforms will be included in its draft Care and Support Bill when introduced in to Parliament and will be subject, therefore, to the passage of this legislation and the subsequent development of detailed proposals over the intervening years.

I recently had a positive and productive discussion with the Care and Support Minister for England, Norman Lamb MP, and I welcome his subsequent letter to me.  This confirms that the budget setting process, and any effect on Barnett consequentials, will be determined in a future Spending Review.

Although there will not be a change in charging arrangements for quite some time in England, I do now want to turn my attention to considering in earnest how best to build on the reforms we have already introduced to charging for care and support in Wales.  I want to make real headway with this and to develop proposals for Wales over the course of the next year.

I have already included within the Social Services and Well-being Bill, which is currently going through scrutiny in the National Assembly, provisions which will enable us to introduce a strengthened deferred payments scheme. I have also sought to “future proof” the Bill by including within it provisions which will allow us the flexibility to introduce one of a number of models of reformed charging arrangements, if we decide to do so.  My intention is to ensure that there will be no delay to reform here due to a requirement to seek new primary legislative powers.

I have previously gone on record to support the principle of a cap in the funding of care and support.  After all, we have led the way in introducing this concept here in Wales, with our £50 maximum weekly charge for non-residential care since 2011.  In fact, I was able to explain this system to Andrew Dilnot when he visited us in that year and to tell him about the advantages I believe it gives people here in terms of paying a fair, transparent and equitable amount for their care, regardless of where in Wales they live.  We have invested over £20 million a year in this maximum charge and our earlier “Fairer Charging” financial protections introduced in 2007 and I believe that people across Wales are seeing the benefits of that investment.  If the new arrangements that have been announced by the UK Government do come into force in England in 2016, people here in Wales will have benefitted from our own cap for five years ahead of people across the border. Even then the cap introduced in England in 2016 will not be retrospective so it will be some time after that those in England will begin to benefit from this.

Despite the general merits of a cap on charging, I have some reservations about whether I would want to introduce here the particular form of cap which the UK Government intends to introduce in England.  Because the proposed system relies on a “taxi meter” style record of individuals’ lifetime contributions, there is the potential for a rather complex system to grow up, making life complicated for people with care and support needs and for the local authorities which will be tasked with keeping track of their (notional) contributions.

Furthermore, I understand that the new English system will rely on a broadened mechanism of personal budgets, which is not being replicated here.  I believe it would therefore be prudent to consider carefully the detailed implementation arrangements that UK Ministers intend to publish later this year, to ensure that we understand how their model will work in practice and its costs, before we make final decisions on what is the right way forward for Wales.

In particular, I would want to be clear about the costs and benefits of raising the capital limits, of introducing a “tariff” taper, and of extending capping arrangements in some way to residential care costs, before considering the desirability of replicating some or any of those measures in Wales.  I note that when the UK Government initially announced its proposed reforms in February it stated that up to 16% of older people paying for care might be expected to face costs of the then proposed cap of £75,000 and would therefore be helped by that cap. There has been quite a bit of debate about whether that is a sufficiently large proportion of people to benefit and I would want to ensure that any new system that we introduced here would bring maximum benefit to the people who really need it.

For this reason, I will want to develop proposals for Wales that not only build on our existing cap on care costs, but that are built on the results of research and other evidence, and on consultation and dialogue both with stakeholders and with the other political parties here in Wales.  My Stakeholder Advisory Group on paying for care has already done sterling work to help towards this goal and I want to thank them for their ongoing contribution to this work. I am publishing their advice to me on the extent to which they see the Dilnot Commission’s recommendations as applicable or beneficial in a Welsh context.

Our proposals for reform will need to be tailored to circumstances and preferences here in Wales – for instance taking account of different patterns in terms of personal wealth and property values and ownership, and recognising the distinctive values and principles that we hold dear in Wales.  They will need to support our vision for a sustainable system of care and support, built around the central importance of prevention, independence and well-being for people of all ages, as set out in the Social Services and Well-being Bill.