Agenda Item
No.
HERTFORDSHIRE COUNTY COUNCIL
ADULT CARE AND HEALTH CABINET PANEL
FRIDAY 5 JULY 2013 AT 10.00AM
3
IMPACT OF DILNOT PROPOSALS IN HERTFORDSHIRE
Report of the Deputy Chief Executive
Author:
Charles Crowe, Income Manager HCS, Tel: 01438 843434
Executive Member: Colette Wyatt-Lowe
1.
Purpose of report
1.1.
To update the Panel on the potential impact for Hertfordshire Council on the
Government’s proposed changes to the rules on charging for adult social care
based on a report by the Dilnot Commission.
2.
Summary
2.1.
The proposed changes to the way social care is charged for is intended to begin
in April 2015 with a new nationally mandated ‘deferred payment scheme’, to be
followed in April 2016 by a new cap on social care contributions of £72,000 per
person. This is part of a wider social care reform bill. Whilst being very positive
news to citizens who will be given more certainty about the costs of their social
care in old age, the changes could have a major financial impact for councils if
not fully funded by general taxation and increase in local government grant.
2.2.
Under the provisions of the National Assistance Act 1948 and the Health and
Social Security and Adjudications Act 1983, individuals who receive adult social
care services can have their means assessed with a view to the local authority
seeking a financial contribution form the individual towards the cost of their care.
This is referred to as a “client contribution”. The manner in which this is taken
forward in practical terms is governed by a number of pieces of Government
guidance. A brief explanation of the respective pieces of guidance is found at
Appendix A, with an internet link to their full content.
2.3.
Expenditure on commissioned adult social care services is £250m per annum in
Hertfordshire and the council receives client contributions towards these services
of £39m per annum.
2.4.
The Dilnot Commission recommends that the state pays for a greater proportion
of people’s social care costs through general taxation. A significant number of
people privately fund their own social care because they have the financial
means to do so. These people would have a greater entitlement to state-funded
services than at present. It is estimated by the Department of Health that 30-35%
of people receiving social care are not in contact with their local authority. All
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would become eligible for council-funded social care when they reach a new
£72,000 cap or when they fall below a new £118,000 capital threshold for
support. There is currently no maximum cap and a £23,250 capital threshold.
The government has pledged to meet these new costs through an increase in
local authority grant.
2.5.
Dilnot’s proposals will create the need for the local authority to undertake more
statutory community care assessments to determine the ‘eligible’ care needs of
self-funding individuals, where the cost of meeting that eligible care need will
count towards the £72,000 cap. Modelling which has been undertaken indicates
this will require substantial additional social work staff – up to 140 posts at a cost
of £5.8m per annum. This is likely to lead to more complaints from individuals
who disagree with the social work assessment and contribution towards the cap.
3.
Recommendation
3.1.
The Cabinet Panel is invited to note and comment on the report.
4.
Background
4.1.
The Dilnot Commission was established by the Government to report on how to
deliver a fair, affordable and sustainable funding system for adult social care in
England. Local government and NHS finances are under significant pressure
and the demand for services is increasing as the population ages. The Dilnot
report suggested a costed way forward to support the White Paper which was
followed up by the publication of the Care and Support Bill in 2012.
Deferred Payments
4.2.
The first wave of proposed change is the implementation of a nationally
mandated ‘Deferred Payment Scheme’ across England by way of regulations.
This scheme allows people to enter into an agreement with the local authority
when they have been assessed as having sufficient capital to meet the cost of
their residential care - but may have to sell their property to release the funds to
pay for care home fees. This arrangement allows an individual to retain the
ownership of their property with the local authority meeting the cost of the
placement. The loan is secured by way of a legal charge on the property which is
enforced when the estate is disposed of.
4.3.
Hertfordshire already operates a deferred payment scheme under legislation
currently in place which is compliant with the proposed regulations although the
rules are likely to be changed to allow councils to charge interest for the whole
duration of the loan rather than only after the person’s death, as now.
Hertfordshire’s current scheme will be evaluated against the new regulations as
soon as these are published.
5.
New rules relating to charging for social care
5.1.
The second wave of change is to introduce new rules on charging for social care
– both for people living in care homes and people receiving care and support in
their own home. Current guidance on how local authorities charge for this
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support can be found at Appendix A.
5.2.
Guidance is still emerging on how the new charging system will operate but in
summary the new rules that have been communicated currently are:
a. A cap of £72,000 per person (in 2016 values) will apply on social care costs;
b. This cap applies to care in both care homes and in the person’s own home;
c. The total spend on social care by both the person and the local authority will count
towards the capped amount;
d. Only ‘eligible’ care needs assessed by social services will count towards the cap,
and it is understood that the cost will be at the council’s funding levels;
e. Once the person has reached the cap, they will not be required to pay towards
their social care again regardless of means;
f. Residents living in care homes will be required to pay “hotel” costs for their food
and accommodation, around £12,000 per annum (in 2017 values). This cost will
not count as ‘care costs’ either towards the cap or after the cap is reached;
g. People receiving social care before age 18 will not be required to pay at all;
h. There will be different rules for people who have or develop long-term social care
needs when aged under 65;
i. For people in residential care homes, the upper capital limit before charging from
capital starts will increase from £23,250 in assets or savings - to £118,000. When
someone falls below this financial threshold, they may be eligible for funding but
will still have to pay a contribution from their capital (on a sliding scale). Those
receiving care at home will continue to have an upper capital limit of £23,250.
6.
Implications and risks of new charging rules for the County Council
6.1.
Loss of income from current service users: The county council currently
collects approximately £27m of income per annum from people living in care
homes and £12m of income from people living in their own home who receive
social care input and who have been assessed as having the financial means to
contribute. The change in rules will result in a loss of direct income from people
who use services who reach the £72,000 cap or who fall below the new higher
upper capital limit threshold of £118,000. The government have pledged to meet
this income gap from general taxation through an increase in local authority grant
but it is unclear how this funding will be allocated to councils. The direct income
lost to Hertfordshire is estimated to be £6.3m per year initially in 2016. However
over the following 4 years this will increase to a loss of £10.1 million per year.
This does not include demographic pressures or adjustment for future inflation.
6.2.
New duty to pay for self-funding people who have reached the cap: A large
number of people who pay privately for their own care and support and who have
not approached the council before will become eligible for funding when they
reach the £72,000 cap. These people are not expected to be a cost pressure to
councils for up to four years after the new rules come into effect (until they reach
the £72,000 care cap from a 2016 start date). However, based on Department of
Health estimates this will cost a minimum of £9m a year to Hertfordshire from
2020. Future demographic pressures and cost inflation will exacerbate those
financial pressures. The government have also pledged to meet this new burden
from general taxation.
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6.3.
New care assessment activity: Given that any spending on care does not
count towards the £72,000 cap until a formal community care assessment has
been carried out by social services, there are likely to be a large number of
people who are currently funding the cost of their own care who will approach the
council for an assessment when the new rules come into effect. It has been
estimated by the Department of Health that 30-35% of people in receipt of care
are funding the full cost and have not approached the local authority. This would
equate to up to 6,000 people who currently fund their own care in Hertfordshire
requesting an immediate assessment when the new rules apply. This will present
recruitment difficulties as additional staff will be required for the year 2016 to
undertake these one-off assessments.
6.4.
The new rules will also lead to a significant permanent increase in the total
number of community care assessments requested by self-funders who wish to
start recording eligible care costs counting towards their £72,000 cap after 2016.
Similarly more people who have assets of less than the new upper capital limit of
£118,000 will present for assessment and care services. Based on estimates,
this will require an additional 2,000 care assessments every year – meaning
approximately 140 extra staff at a variety of grades, based on current levels of
efficiency. This staffing cost will be £5.8 million per year. There will also be
significant training and recruitment costs and difficulties to sourcing large
numbers of new trained staff. This cost is estimated to be in the order of £5.5
million over 4 years. The Association of Directors of Social Services (ADASS) is
lobbying the government to meet the costs of this new burden from taxation.
6.5.
Additional complaints: Due to the new financial implications of determining
‘eligible’ care needs by social services, it is expected that there will be an
increase in the number of appeals and complaints about the outcome of these
assessments, particularly from people who have been funding their own care but
whose needs are not deemed as being ‘eligible’ using national eligibility criteria.
6.6.
Loss of unpaid family carers: The new system introduces a significant financial
disincentive for the family of vulnerable adults to provide informal care. As family
care is not covered as an expense and would therefore not count towards the
cap, this care provision would lengthen the time that an individual would need to
fund their own care. Unless the service user was paying the full cost of their
support, it would ultimately result in a worse financial situation. This anomaly has
been identified to the Department of Health but as a significant risk both in
financial terms to individuals but also in terms of the potential need for an
increased social care workforce in the medium-term.
7
Equality Implications
7.1
When considering proposals placed before Members it is important that they are
fully aware of, and have themselves actively considered, the County Council’s
statutory obligations in relation to equalities. This will include paying close
attention to any equalities impact assessment produced by officers.
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7.2.1 The Equality Act 2010 requires the County Council when exercising its functions
to have due regard to the need to (a) eliminate discrimination, harassment,
victimisation and other conduct prohibited under the Act; (b) advance equality of
opportunity between persons who share a relevant protected characteristic and
persons who do not share it and (c) foster good relations between persons who
share a relevant protected characteristic and persons who do not share it. The
protected characteristics under the Equality Act 2010 are age; disability; gender
reassignment; marriage and civil partnership; pregnancy and maternity; race;
religion and belief, sex and sexual orientation.
7.3
As a result of the proposed changes it will be necessary to monitor their impact
on those with protected characteristics as the changes are implemented. It is
proposed that this will be taken forward by considering the information so far
obtained/considered and undertaking an Equality Impact Assessment which will
be reviewed on an on-going basis.
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Appendix A – Background papers
Current charging rules and regulations:
Fairer Charging Guidance: In 2003, the Government provided guidance for local authorities
on setting charges for non-residential social care services. That guidance seeks to ensure
that people who use services are treated fairly and are not asked to make a contribution
towards their care that will leave them in financial hardship. This is called the Fairer Charging
Guidance and ensures that the charge levied by local authorities is fair, does not exceed the
cost of the social care service provided and people are only charged for what they have
received.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/127104/Updat
ed-Fairer-Charging-Guidance1.pdf.pdf
Fairer Contributions: This guidance is for councils in England to use when determining
what contribution, if any, a person receiving social care should make towards it. It ensures
people are left with a minimum amount to live on after their social care charge is calculated,
that councils take into account their disability related expenses and that councils consult
publicly on any changes to their local charging policy.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/147697/dh_12
1223.pdf.pdf
Charging for Residential Accommodation Guide (CRAG): Under the National
Assistance Act 1948, where a local authority arranges residential care for a person it is
required to carry out a financial assessment and charge the person such sums as they
are assessed as being able to pay. The financial assessment is made using the
National Assistance (Assessment of Resources) Regulations 1992. The regulations are
updated annually. The latest amendment to the 1992 regulations is S.I. 2011/724.
People’s property assets may be taken into account when determining the charge for
residential care.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/151959/d
h_125836.pdf.pdf
Deferred Payment Scheme: When people enter Residential/Nursing care, their home
may be taken into account as a capital asset in their financial assessment.
Hertfordshire County Council already has a deferred payment scheme that enables
people to defer the sale of their property until they die. This loan is interest free until
either the property is sold or 56 days after the resident’s death. This scheme was
reviewed in 2012 and eligibility criteria put in place.
The Dilnot Commission Report:
http://webarchive.nationalarchives.gov.uk/20130221130239/http://www.dilnotcommission.dh.
gov.uk/our-report/
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