She had been Chancellor for less than a month, but Rachel Reeves’s political honeymoon was about to end – with bitterly disappointing news for disabled and vulnerable people, for the elderly, and for their families.
On 29 July last year, Reeves announced the plan to introduce a lifetime cap on the amount of money that individuals in England should ever pay towards their own social care – set at £86,000 – was being scrapped.
Labour had reassured voters just three weeks before the general election that if they won power, they would implement the “social-care cap” announced by the Conservatives a few years earlier. Its aim was to stop people feeling forced to sell their homes to afford basic services, like help with eating, getting dressed or having a wash, or more complex care.
Reeves blamed the U-turn on the “unforgiveable” financial situation she inherited from the Conservatives.
One year on, economist Sir Andrew Dilnot is still angry about the decision and how it is affecting people – especially as services are often overstretched and hard to access.
It was Dilnot’s commission on social care which first recommended a cap in 2011. MPs agreed, but the measure was continually postponed by ministers in 2012, 2015 and 2022.
Now, those who rely on a “failing system” – in the words of the Health and Social Care Committee – are left waiting for action again.
In contrast, since 2002 Scotland has provided some forms of personal care for free to people in need aged over 65, including help with shopping and cleaning, and extended that to all ages in 2019.
Dilnot was “surprised and appalled” by the Government’s decision for England, he tells The i Paper. “We don’t say to anybody: you should save enough money just in case your car crashes, or your house burns down, or you have a healthcare problem,” he argues. Expecting people to pay for their own social care is “bonkers”, when a civilised society should provide insurance measures against the financial risks of frailty, accidents and illness.
“Hundreds of thousands of families’ lives are blighted every year,” he says. “It’s a disgrace. It’s a mark of shame for all of us – politicians, the media, the whole public.”
The UK’s ageing population is placing more pressure on social care (Photo: Matt Cardy/Getty)The huge and increasing uncapped costs
Experts say that many people still do not realise, until it is too late, that generally individuals pay the full costs of any social care, not the state.
Some end up “terrified” and “wish they were dead because of worrying they’re a financial burden on their families”, says Dilnot.
Care visits to people’s own homes typically cost £25 per hour, which adds up to £36,500 a year for someone needing four hours a day. The average annual cost of living in a care home is £67,000, according to industry figures, and that rises to £80,000 for residents who need nursing care.
But people in England only receive financial help for any kind of social care if their total savings and assets are assessed to be worth less than £23,250. For those needing care homes, things are more generous in Scotland, where the sum is £35,000, and in Wales, where it is £50,000.
That cut-off sum in England was frozen by the Government again in February – for the 15th year in a row – meaning it has reduced by 36 per cent in real terms since 2010.
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Jess McGregor, president of the Association of Directors of Adult Social Services (Adass), warns “there are huge numbers of people who fall outside that, who will struggle to resource the care they need”.
“Increasingly, state-funded or local authority-provided social care is only really a service for people who are in poverty,” says McGregor, who also runs adult social care and health in Camden, north London.
As a consequence, the UK has 5.8 million unpaid carers, according to the 2021 census – with 1.7 million of them providing at least 50 hours of care a week. Carers UK warns that 1.2 million unpaid carers live in poverty.
And costs are going up. The Government refused to exempt care providers from its increase in national insurance in April. Combined with an increase in the National Living Wage, it meant 18,000 organisations faced increased costs totalling £2.8bn – an average of £155,000 a year – leading to higher fees and potential closures of some services.
Home Secretary Yvette Cooper’s announcement in May that recruitment of care workers from abroad will be banned under visa reforms to reduce net migration is also expected to increase wage costs by billions.
McGregor rejects the Government’s classification of care as “low-skilled work” and believes professionals deserve higher pay, but says ministers must recognise that relying purely on UK-based labour will make services even more expensive.
The Government says it still intends to create a National Care Service in England (Photo: Jack Hill/Reuters)The worsening funding crisis
Pressures on the system will keep on increasing, explains Ben Zaranko, who analyses social care at the Institute for Fiscal Studies.
“There are more elderly people, and more people surviving into adulthood with severe disabilities and medical problems, so the system needs more money just to stand still.”
He adds that local authorities are responsible for social care, but the areas with the biggest needs are often where revenues from council taxes and business rates are lowest.
“Councils do all they can,” says McGregor, “but it’s getting harder and harder with insufficient resources.”
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McGregor says the Government deserves recognition for allocating some extra money “to try to stabilise social care”, and there is some positive news in a new Adass survey. The number of people waiting over six months for an assessment is down by 28.5 per cent year on year. Three million more hours of home care have been delivered, a 6.6 per cent annual increase.
The findings also highlighted deepening problems, however.
The Government wants earlier interventions in health and social care, so people are helped before problems become so bad that they end up in hospital, which increases costs and waiting times. Yet the Adass research indicated that care leaders “have reduced spending on the latter by more than 10 per cent this year, as they are forced to prioritise immediate needs and people in crisis”.
Budget overspending also hit £774m, the highest in a decade, which is “likely to result in councils further tightening the eligibility criteria”.
In short, the situation is a recipe for more rationing.
Some care homes have warned they could close because of increased tax and salary costs (Photo: Matt Cardy/Getty)Pressure for action amid spending headache
Labour came into office with a grand but vague manifesto pledge of creating a National Care Service. It promised to set new standards, saying: “Services will be locally delivered, with a principle of ‘home first’ that supports people to live independently for as long as possible.”
Instead of getting on with this, however, in January it commissioned Baroness Casey to produce an independent report on how best to do it. Her conclusions are not due until 2028, and reforms might not arrive until 2036.
This three-year wait is “entirely unnecessary” after so many previous reviews, says Dilnot, concerned that families are suffering in the meantime. He believes Casey will do an excellent job, but hopes she reports back sooner.
Plus, MPs may then be entering the final months before facing voters. Will they be prepared to tell people that taxes must go up to pay for better social care? “Our anxiety is whether there’ll be enough public and political appetite for that on the eve of the next general election,” says McGregor.
Wes Streeting has admitted this issue himself. As the Health and Social Care Secretary wrote in January: “General election campaigns are where plans for social care go to die.”
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While Britain has a stagnant economy, the key issue is obvious. “There is a remarkable degree of consensus about what we should spend money on. There isn’t much consensus about where it should come from,” says Dilnot.
Under Boris Johnson, a proposed 1.25 per cent increase in national insurance was supposed to provide the cash, but that was ditched by Liz Truss.
Zaranko, from the Institute for Fiscal Studies, concedes that sluggish growth, high taxes, high borrowing and pressure to increase defence spending and public investment, all make life difficult for the Chancellor.
He calculates that introducing a cap would currently cost about £1.5bn a year, potentially rising to £5bn by the end of the decade.
“In the context of wider pressures on public finances, that would be unhelpful for Reeves. But those numbers aren’t enormously big,” says Zaranko.
The problem is that unlike Reeves’s cuts to winter fuel payments, which provoked uproar and led to a U-turn, the level of outrage about social care still isn’t dramatic enough to worry ministers. “It just boils down to political will,” he believes.
A Government spokesperson said Labour has taken “immediate action” to start fixing “a social care system in crisis”.
This includes a funding increase of £4bn by 2028-29, a grant to deliver an extra 15,000 disability home adaptations and a £2,000 uplift in the allowance for unpaid carers.
Sir Keir Starmer has said he appreciates the difficulties of care work after seeing his sister work “14-hour shifts, often overnight,” at an elderly home in Kent during the pandemic. He told the 2023 Labour Party conference of how she endured “unimaginable pressure” but still struggled “just to make ends meet”.
Given Starmer’s family knowledge of problems in the system, however, many carers and those in need must wish his Government could act more urgently. In the meantime, they go on waiting.
@robhastings.bsky.social
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