What is the social care reform the government has delayed?

Strategy to invest £36bn over three years to boost pandemic recovery postponed by two years

Among the deluge of announcements in chancellor Jeremy Hunt’s Autumn Statement was the news that the government’s planned social care reforms would be delayed for two years.

Mr Hunt said councils had “very real concerns” about their ability to deliver the so-called Dilnot reforms, developed by economist Sir Andrew Dilnot, in time for the original launch date of October 2023.

“I will delay the implementation of these important reforms for two years, allocating the funding to allow local authorities to provide more care packages," the chancellor told MPs during his statement to Parliament.

The reforms would cap the amount any person in England would have to pay towards social care in their lifetime. Under the existing plan, the costs would be capped at £86,000 per person.

Mr Hunt did also announce that the adult care sector would receive additional grant funding of £1bn next year and £1.7bn the year after in order to support them in realising the government’s aim of freeing up “some of the 13,500 hospital beds that are occupied by those who should be at home”.

The chancellor, himself a former health secretary, also said that the NHS would receive extra £3.3bn in each of next two years as part of an effort to bring “Scandinavian quality and Singaporean efficiency” to Britain’s ailing health service.

Here is a little background on the what was intended to be the biggest catch-up programme in the history of the NHS in England and a major overhaul of the social care sector before it was shelved.

What were the plans?

In September 2021, the government pledged to invest £36bn over the next three years to help the NHS recover from the coronavirus pandemic and reform the adult social care system so people no longer had to face catastrophic care costs.

The majority of the money was intended go to the NHS, with social care receiving £5.3bn over the next three years.

From October 2023, nobody was due to pay more than £86,000 for their social care – regardless of their assets.

The government said at the time that it would fully cover the cost of care for those with assets under £20,000 and contribute to the cost of care for those with assets of between £20,000 and £100,000.

Why was it thought necessary?

The NHS waiting list was then (and remains) at an all-time high as the nation continues its recovery from the pandemic.

The social care sector has been in need of substantial reform for years and workforce and sustainability issues were exacerbated by the recent crisis.

How would it have worked?

The programme was to have been funded through a UK-wide health and social care levy, based on national insurance contributions paid by working adults.

Between 2022 and 2023, national insurance rates were to rise by 1.25 percentage points. From April 2023, the levy would have appeared as a separate entry on individuals’ pay slips. At this point, working adults above pension age would have begun to chip in.

The government also intended to raise the rate of dividend tax by 1.25 percentage points to ensure people who receive income from dividends made the same contribution.

How much would we have had to pay?

Those who earn more will pay more, prime minister Boris Johnson pledged at the time the policy was announced.

For example, a basic rate taxpayer earning £24,100 would have contributed £180 a year and a higher rate taxpayer earning £67,100 would have contributed £715 a year.

How would the NHS have benefitted?

Most of the money in the first three years would have gone towards the NHS – it was expected to fund an extra nine million checks, scans and operations – as well as help the NHS focus on innovation.

What about social care?

The social care sector would have received £5.3bn between 2022/23 and 2024/25.

Less than half of this would have funded the minimum floor and cap.

Around £50m would have gone towards workforce training and skills, including 700,000 new training places, while money was also supposed to go towards increasing local authority payment rates, integration and quality.

When was social care supposed to get the money?

The social care sector was to receive some of the extra money in the next financial year and throughout the three-year window.

But more money would then have been diverted to the sector after the three years were up as people hit the cap.

What about Scotland, Wales and Northern Ireland?

The devolved nations were to receive an additional £2.2bn in extra health and social care spending from the levy.