The recent publication of a Research Briefing by the House of Commons Library entitled “Introducing a cap on care costs” offers an insight into the landscape of social care reform. It is an overview that sets the stage for understanding how we arrived at our current situation and where we might be headed.
The Road So Far
In September 2021, the previous government announced a significant £3.6 billion investment aimed at reforming social care payments in England, spanning from 2022/23 to 2024/25. Initially, these reforms were expected to take effect from October 2023. However, the 2022 Autumn Statement postponed this to October 2025, reallocating funds to local authorities to address immediate pressures in adult and children’s social care. This included an increase to the Upper Capital Limit; this currently stands at £23,250 in England. Along with a cap on personal care costs at £86,000 per person over a lifetime.
Political Winds of Change
Fast forward to the present, and during the recent election campaign, Wes Streeting, now Health and Social Care Secretary, indicated that Labour has no plans to alter the new October 2025 implementation date. However, details on how these plans will be funded remain vague.
The Labour election manifesto kept specifics about care reforms under wraps, likely to maintain flexibility while assessing the financial landscape post-election. Instead, Labour focused on a broader context, proposing improvements in the care workforce. They plan to introduce a Fair Pay Agreement to align the wages of 1.5 million care workers with those of NHS staff, ensuring at least £12 per hour for every care worker. This initiative aims to enhance recruitment and retention in social care, easing the burden on the NHS.
A Closer Look at the Impact
While the intention to uplift care workers’ wages is commendable, it raises questions about the financial implications for care providers. If employers are expected to absorb the increased wages without additional state support, this could strain both public and private sector providers.
This brings us to a crucial point: the need for a transparent, honest debate about funding for not just health and social care, but also for energy, education, transport, and infrastructure. After all, if we want high standards in these areas, someone has to foot the bill, whether it’s the state or us, the taxpayers.
Generational Equity in Focus
A pressing issue that surfaces is the potential for generational inequality. Should the state cover living costs for older adults, allowing them to retain their personal wealth and pass it on to heirs, while younger generations face less support and greater financial insecurity? This scenario could widen the already existing generational divide.
The Kings Fund1 organisation reported that in 2022/23, total social care expenditure was £28.4 billion, with spending equally divided between working-age adults and those aged 65 and over. Yet significant unmet needs persist, highlighting the ongoing challenge of adequately funding social care.
Next Steps
As we await further clarity from the new government on their intentions for social care reform, staying informed is key. If you would like to discuss self-funding options for later life care, please get in contact with our Society of Later Life accredited advisers.
1In 1897, the then Prince of Wales, later King Edward VII, founded The King’s Fund to raise money for London’s voluntary hospitals. The work of the Fund has evolved over time in response to the changing needs of the population but their mission to improve health and care for all endures. Social Care Expenditure. Kings Fund 13th March 2024
