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Written Statement - Paying for Social Care – Update  

Gwenda Thomas, Deputy Minister for Social Services

In March last year I issued a Written Statement to inform Members of my intention to reform the arrangements for paying for social care in Wales. This followed the UK Government’s announcement at that time of its intention to reform those arrangements in England from April 2016. I thought it was an opportune time now to provide an update to Members.  

While the UK Government has since undertaken a consultation on the principles of how people in England should pay for their care and support post April 2016, and made a call for evidence, it has yet to confirm the detail of how its reform will operate. In addition, as I confirmed last year, it is still the case that the budget setting process for this reform, and hence any effects on Barnett consequentials, will be determined in a future Spending Review following the next general election. As I outlined at that time, I want to be well informed of the exact detail of the reform to be introduced in England, and its funding implications, before making any final decisions on the exact nature of reform I will introduce in Wales.  

Nevertheless, I would reiterate my commitment to introduce reform of the arrangements for paying for care in Wales and as such I am progressing my plans as far as possible pending UK Ministers’ further announcements. As I confirmed last year I want reform in Wales to deliver a fairer and less complex system of paying for care than the present arrangements, and which is affordable and sustainable in the longer term. Instrumental in achieving this is our Social Services and Well-being (Wales) Bill. The Bill will provide the legislative framework by which to deliver this reform. It will enable any one of a range of reform options to be implemented alongside the implementation of the other major reforms stemming from the Bill. As you know the Bill is in its final stages of scrutiny by the National Assembly.  

As I indicated last year I want reform in Wales to be tailored to our particular circumstances. There are important differences in key aspects relating to paying for care between England and Wales which mean that the reform planned in England is not necessarily the reform that is appropriate in Wales. For example in relation to demography, incidence of disability, personal wealth, property values and ownership, and a range of other factors. We also need to recognise the distinctive differences in values and principles regarding public service provision we hold dear, as enshrined in the Social Services and Well-being (Wales) Bill.

To be able to consider what approach is right there is a need to have access to key data applicable to Wales that impact on paying for care and the options for reform. As a result I wish to inform you that I have recently awarded a contract for an independent research study on the future of paying for care in Wales. The study is being undertaken by LE Wales, a leading economics consultancy specialist in public policy economics. It will gather and analyse available core data and indicators relevant to the future of paying for care in Wales and use this information to undertake an appraisal of the options for reform. This study has already commenced and is due to be completed by September this year.

As the outputs from this study emerge I wish to engage with stakeholders on their views on the available options for reform. This is so as to have a complete picture of data, options and views to consider alongside the detail of the reforms taking place in England. As a result I will shortly be re-establishing my Paying for Care Stakeholder Advisory Group to seek their views as the study progresses. I also wish to share this with the other political parties here in Wales to equally seek their views, given this is one of those fundamental issues which crosses party politics. Armed with all this evidence I intend to outline later in 2014 the approach to reform I want to pursue in Wales.  

In the interim there is the need to ensure that our present arrangements for paying for care are operating effectively. As I stated last year I see an integral part of our reform as building on the success of our non-residential care charging strategy introduced in 2011. This initiative was a forerunner to the care cost cap now proposed in England. It is a simple yet effective means of providing an equitable limit to the amount a person is required to pay for their non-residential care, providing them with an assurance of the most they will be asked to pay for their care regardless of where they live in Wales. This provision is unique to Wales and was welcomed by service users and the organisations representing them. To secure its continuation we are investing over £13 million p.a. to meet local authorities’ costs in operating this.  

The level of the maximum of £50 per week has not changed since it was first introduced in 2011 and Members may be aware that I have been recently consulting on my proposal to revise its level to £55 per week from April this year and £60 per week from April 2015. Since that time there has been inflation of around 10% in total, with a knock on effect on service provision costs, and increases in state pensions and welfare benefits of around 7.5% in total over the three years to now. Consequently, as this initiative has now bedded down I feel the time is right to update its level.

That consultation has just concluded. While there were a small number of responses, 26 in all, local government responses agreed with my view and in some cases argued for a higher increase of twice that I proposed. This was in view of the financial pressures local authorities face in providing frontline services. Conversely third sector organisations who responded representing older and disabled people, and a small number of service users, argued for a reduction in the maximum charge, or at least no change to its level. This was in view of the financial pressures older and disabled people face as a result of the UK Government’s Welfare Reform agenda and increases in their daily living costs.

Having carefully considered both points of view I have decided on balance to implement a revision of the maximum charge as I outline above. This is to maintain the real terms affect of this. While I acknowledge the very real financial pressures that both local authorities and service users are experiencing I do not feel it is appropriate to make no change to the maximum, or to reduce it so as to further reduce local authorities’ income from charging. That said, I feel it is equally inappropriate in the current climate to expect the older and disabled service users of Wales to be able to be charged an increased maximum charge 20% and subsequently 40% higher than its present level. I will therefore be laying amending regulations before the National Assembly to effect the change in the level of the maximum from April 2014 to increase this to £55 per week.  I will do a similar thing next year for the increase from April 2015 to £60 per week. The future level of the maximum charge beyond 2015 will then, of course, be considered as part of the wider paying for care reform.

I will keep Members abreast of progress as developments unfold.