Councils call for a delay to ‘unfunded’ cap on care, warning that flagship reforms have a £30bn funding black hole and will be impossible to implement next Autumn

England’s largest councils today call for a delay in the introduction of the cap on adult social care costs, warning they will be ‘impossible’ to implement by October next year.

It comes as new analysis by Newton for the County Councils Network (CCN) reveals the costs of the new cap on care and more generous means-test have increased by a third – with the total costs of the reforms for older adults now totalling £30bn over the next decade – a figure councils say is unfunded.

Download the new CCN Analysis report here.

CCN is urging the Health and Social Care Secretary to make an urgent decision and delay the reforms for further year at least, with a new survey showing that nine in ten councils are ‘not well prepared’ to implement the changes by October 2025 due to a combination of funding uncertainty, demand for services and a persistent workforce crisis.

Announced in 2020 and encompassing a cap on care costs, a more generous means-test and a new fair cost of care for providers, Wes Streeting said during the election it was ‘the plan’ to introduce the reforms in October 2025, while more recently, he said he asked officials in his department to provide a ‘progress’ update on the reforms.

Whilst councils are supportive of the plans, local authorities in the CCN have raised the alarm: warning that unless the government finds tens of billions in additional resources over the next decade, the reforms would be unfunded. The Institute for Fiscal Studies has recently confirmed that there is no existing funding set aside for the reforms. Therefore, it would need to come from existing budgets of local or central governments or raised via tax rises.

In late 2022, the previous government postponed the reforms until 2025 and instead re-prioritised funds for the changes to address day-to-day pressures for councils in delivering social care, worth £1.9bn a year. The survey shows that councils have become ‘dependent’ on this annual funding boost, with any attempt to redirect to these resources to pay for the reforms potentially having ‘devastating’ consequences for care services.

The new survey and financial modelling are contained in CCN’s new report Adult Social Care Charging Reform which illustrates the challenges faced by councils in implementing the reforms:

• Due to a combination of inflation and demand the updated analysis by Newton shows that the minimum total cost of the reforms over the nine-year period analysed now stands at £30bn. The costs of the flagship element – the cap on care and extended means test – has risen 34%, from £13.9bn to £18.6bn.
• Councils in county and rural areas are most exposed to these costs, with 63% of the entire costs of the means-test and cap within these areas. Regionally, councils in the South East, South West and East of England combined account for 61% of the total minimum cumulative cost of these elements.
• With no money currently allocated to the reforms, funding was councils’ biggest concern about implementing the reforms. All bar one (97%) of councils said they were ‘very concerned’ about a shortfall in funding. In addition, eight in ten said they were very concerned about implementing the changes in the current timescales, whilst six in ten said they were very concerned about recruiting the numbers of staff to carry out extra assessments.
• Because of these funding, staffing, and timescale concerns, nine in ten (86%) of councils said they were not well prepared for the reforms with nine in ten (92%) supporting a delay of at least a year or more. Since the delay in 2022, and with uncertainty on the future of reforms after the election, preparations have been totally paused nationally and locally, while the analysis shows over 5,000 additional staff would need to be recruited.
• Every council said adequate funding was necessary to make the reforms workable. Nine in ten also said the current system must sustainable before introducing reform.
• The £1.9bn this year in funding re-prioritised from the reforms in late 2022 has kept the show on the road for day-to-day adult social care services. Nine in ten (86%) councils spent the money offsetting inflationary costs, whilst half (54%) used it to commission more care packages and recruit more social workers.
• If the government was to instead use this funding for reform, there could be significant consequences. Without this funding, eight in ten (80%) of councils said it was likely they would not fulfil their statutory duties in adult social care, and six in ten (57%) said they would have to consider issuing a S114 Notice.
• Keeping services at a level as they are now and investing in workforce capacity is the top priority for councils over the next Parliament. All bar one council (97%) said ensuring there is enough funding to deliver the same amount of care services at present was their top priority, followed by workforce recruitment and retention (94%). Just a quarter (24%) said introducing the charging reforms were a high priority, with less than one in ten (9%) believing the introduction of a ‘national care service’ should be a priority.

Cllr Martin Tett, Adult Social Care Spokesperson for the County Councils Network, said:

“We are just over 15 months away from the introduction of seismic reforms in adult social care, and the new government must make an urgent decision on their future. Councils have serious concerns over their deliverability: these new estimates show the costs have increased significantly to £30bn over the next decade, while currently the reforms are totally unfunded. The political hiatus before the election also meant preparations have been suspended nationally, while locally councils have been focused on day-to-day services, and still face major shortages in social workers.

“As a result, nine in ten local authorities are not well prepared to implement the reforms in October 2025. To put it bluntly, it will be impossible to implement these reforms next Autumn in the current timescales and with no funding committed to the reforms. Equally, the government cannot take money currently being spent on day-to-day adult social care services for these reforms, with our survey showing it will have devastating consequences for councils and the thousands of people who rely on local authority care.

“We have always supported the principles of the reforms, as they will make the system fairer. But if the government is to proceed with the reforms, then it must delay them by at least a year – but likely more – to reassess the real costs and set out a way to fully-fund them. We understand yet another delay will be frustrating for campaigners, but the under current circumstances introducing them next year could have some serious consequences.”