Sir Andrew Dilnot calls for cap on care home costs to avoid old age lottery

A cap on care home costs would remove the “catastrophic risk facing us all”, the economist who carried out a landmark review of the issue has said.

Sir Andrew Dilnot said people currently face a “later life care cost lottery” as he urged ministers to reform state support.

His comments come after it was reported this week that the Government has axed plans to introduce a cap on social care costs by 2020.

Former prime minister David Cameron promised to bring in an upper limit of around £75,000 on the amount people must pay towards their own care, but it is now thought this plan has been shelved.

A green paper consultation document on the future of social care was due to be published by the end of the year.

In 2011, Sir Andrew recommended a cap on care costs in his report to ministers.

He recommended that an individual’s lifetime contribution towards their social care bill should be capped at £35,000 and, after the ceiling was reached, people should be able to apply for full state support.

His study also proposed increasing the means-tested threshold – above which people are liable for full care costs – from £23,250 to £100,000.

Preparing to give the inaugural Royal London annual lecture later on Thursday, Sir Andrew suggested a cap would also mean people could take out insurance policies to cover the cost.

He said: “Many of us will not need to spend large amounts on care in later life, but for those who do, the costs can be huge.

“We need to find a way to pool this risk rather than let it be a later life care cost lottery.

“A cap on care costs removes the catastrophic risk facing us all, and could help to stimulate more provision of private sector financial services.

“Coupled with a reform to means-tested state support, this could help tackle the ‘broken’ care market where the supply of residential and domiciliary care all too often does not meet the needs of older people.”

The comments come as a new survey from the Association of Directors of Adult Social Services (ADASS) shows that more than half of councils expect to overspend their adult social care budgets this year.

Overspending could amount to around £21 million per council, it said, while an extra £270 million may need to be found for six years of back pay for sleep-in shifts.

HM Revenue and Customs has said workers aged 25 and over must be paid the full £7.50 hourly minimum wage, though enforcement action on the issue is currently suspended.

The survey of 105 directors found that 67% of councils reported care home providers had closed in the first five months of the financial year.

Meanwhile, 48% said providers had handed back contracts, more than in the previous survey, and 94% of councils said they had experienced issues with quality in social care, also a rise on the previous survey.

ADASS president Margaret Willcox said: “Our latest survey findings should act as a fresh wake-up call to government that adult social care is coming perilously close to becoming unsustainable.

“The extra £2 billion in funding, while welcome, is simply a short-term fix and cannot hide the fact that by the end of this financial year, £6 billion has been cut from councils’ adult social care budgets since 2010 – with demand for our services growing all that time.

“This is simply unacceptable and needs to be addressed, not only in the Autumn Budget, but also in the promised consultation on the future of adult social care, because we cannot continue without sufficient and sustainable resources.”

A Department of Health spokeswoman said: “We are absolutely committed to improving social care in this country for both individuals who are cared for and staff, and have provided £2 billion in additional funding over the next three years.

“Going forward, we will be holding an open consultation on how to reform the system to drive sustainability and improve quality of care.

“This will include the level and design of a cap as part of the overall package of reform.”

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