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The Department of Health and Social Care (DHSC) has announced that five local authorities in England will implement a new and improved adult social care charging reform system, which caps the cost of care.

To ensure a smooth transition from the current charging system, the five “trailblazing” local authorities – Wolverhampton, Blackpool, Cheshire East, Newham, North Yorkshire – will put the charging reform plans in place in January 2023 ahead of a national rollout in October next year.

The trailblazing areas were selected to ensure a cross section of communities are represented, and so any insight, evidence and lessons learned from this initiative will be useful to providers and authorities in all parts of England, according to the department.

Each council will shape the UK Government’s approach to implementation by allowing DHSC to test key aspects of the reforms. The department says that this initiative will generate valuable evidence and insight to help the government to monitor progress, identify challenges and improve understanding of how this will work in practice.

These five local authorities will also co-produce documentation to educate and inform other local authorities with a series of events to be planned before the final rollout.

The launch of the this “trailblazer” initiative is running in parallel with the ongoing parliamentary discussions on the Health and Care Bill, which includes charging reform. At its heart, the Health and Care Bill aims to create a modern health and social care system that delivers better and more joined-up care in local communities.

Background information on charging reforms

On 7 September 2021, Prime Minister Boris Johnson announced that from October 2023, the UK Government will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. The new cap applies to both new entrants to the social care system and existing users.

DHSC then published a policy paper in November 2021 explaining the workings of the new charging reform.

The local authority means test for financial support will continue to work in the same way as it does currently, the paper states. This means test determines what someone can afford to contribute towards the costs of their care based on the amount of assets and income a person has.

From October 2023, the points below explain how councils will apply the charging rules to determine a person’s contribution:

  • People with assets above the new upper capital limit (£100,000) will not receive local authority support and will fund their own care
  • Those between the new capital limits (£20,000-£100,000) will be charged what they can afford from income plus a means-tested ‘tariff’ contribution from assets – for every £250 of capital between the lower and upper limit, an income of £1 a week is assumed, and this will be payable towards the cost of care
  • People below the new capital limit (£20,000) will no longer contribute from their assets and only what they can afford from their income

For each person with eligible care needs, the council must provide either a personal budget, where the local authority is going to meet the person’s needs, or an independent personal budget (IPB), where the individual arranges their own care.

The personal budget will set out the cost to the local authority of the care they have arranged, whereas the IPB sets out what it would have cost the local authority to meet the person’s needs.

The person’s personal budget or IPB will be used to calculate the amount that will count towards the cap. For individuals who receive financial support for their care costs from their local authority, it is the amount that the individual contributes towards these costs that will count towards the cap, subject to Parliamentary approval.

Everyone will have a care account, which will be maintained by the council and will keep track of their progress towards the cap. Local authorities will provide regular care account statements, and engage early with the person once they are close to approaching the cap to discuss how their needs will be met.

Notably, the cap will not cover the daily living costs for people in care homes, such as food, rent and utility bills. People will remain responsible for their daily living costs throughout their care journey, including after they reach the cap. These costs will be set at a national, notional amount of £200 per week.

Consultation on charging reforms

DHSC is currently running an open consultation that seeks views on the statutory guidance detailing how an £86,000 cap on care costs would operate in practice in England from October 2023.

Anyone can respond to the consultation, including local authority representatives. It closes at 11:45pm on 1 April 2022.

Read more about the social care charging reforms consultation here.

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