Councils’ ‘variable’ approach to deferred payment ‘could undermine social care reform’

22 May 17

Conservative plans to shake up social care funding are being built on “very shaky foundations” as councils do not take a consistent approach to deferred payments, a former pensions minister has warned.

Sir Steve Webb, a Liberal Democrat minister in the coalition government, made the comments after surveying 140 councils and discovering there was huge variation in the way they used deferred payments for social care.

He criticised Tory plans to include the value of someone's home when deciding how much they must pay towards care at home – but allow them to pay after they die.

Theresa May has pitched the proposals as a way of ensuring fairness across the generations but disparity in the way councils approach deferred payments could impede the rollout of the flagship policy.

Webb said: “It is clear that there is already a lottery as to whether people facing significant care costs can exercise their legal right to defer their payments under the existing system.

"The government will need to investigate very quickly why the present system is not working properly, otherwise there is a danger of building a new system on very shaky foundations.”

Currently, people in residential care can ask their local authority to pay their bill and recover the money from the sale of the family home after they die.

The Conservatives' plan would extend this right to those receiving care in their own homes, who would have to meet costs until they were down to their last £100,000.

Following a series of freedom of information requests, Webb, who now works at life and pensions company Royal London, discovered some councils had entered into hundreds of agreements.

Southampton City Council had 331, followed by Essex County Council with 208 and Middlesbrough Council with 165.

However 10 authorities – Westminster, Tower Hamlets, Hackney, Kensington and Chelsea, Haringey, Lewisham, Lambeth, Ealing, Blackburn with Darwen, and Luton – haven’t issued any.

Last week, the Institute for Fiscal Studies said the Conservative policy to get elderly people to pay for their own care “makes no attempt to deal with the fundamental challenge of social care funding”.

The IFS said the Tory plans would tip this balance of public spending towards a greater fraction of spending on residential care – increasing public funding for residential care by raising the asset threshold but decreasing public funding for home care by including housing wealth in the asset test.

Currently, almost two thirds (64%) of local authority spending on care for the over-65s goes to residential care, with the remainder spent on home care. 

The IFS stated: “It is not possible to be confident whether the change would increase or decrease overall spending relative to the current system on care on the basis of publically available data.” However, they did conclude it was “less generous” than the current system.

Labour and LibDem critics of the Conservative proposal have dubbed it a “dementia tax”.

Yesterday work and pensions secretary Damian Green defended the policy on BBC One's Andrew Marr Show. He said: “We have set out the policy, which we are not going to look at again.”

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