Consultation outcome

Charging reform: government response to the consultation on 'implementing the cap on care costs' operational guidance

Updated 16 January 2023

Following an announcement in the government’s Autumn Statement 2022, the planned adult social care charging reforms are not going ahead in October 2023.

Overview of the consultation

Purpose of the consultation

The government is changing how personal care is paid for and ending the risk of unpredictable and unlimited care costs. From October 2023, the government will introduce:

• a new £86,000 lifetime cap on the amount anyone in England will need to spend on their personal care over their lifetime; only personal contributions will count towards the cap
• an extended means test, extending state support to anyone with up to £100,000 of assets – more than 4 times the current limit – and anyone with assets under £20,000 will not have to pay anything for their care from their assets

For the reforms to be successfully implemented, local authorities will need to fully comprehend and apply their core legal duties and powers under the new system. For that reason, it is critical that the statutory guidance is clear, comprehensive and operable.

The government has consulted on statutory guidance for local authorities, which will form part of the existing Care and Support Statutory (CASS) Guidance. The aim of the consultation was to ensure that the guidance is clear and workable for local authorities.

On 4 March 2022, we published 3 documents:

1. a consultation: ‘operational guidance to implement a lifetime cap on care costs’
2. draft guidance: ‘supporting local preparation’
3. draft guidance: ‘implementing the cap on care costs’

We are responding to the consultation in 2 parts. The first part of the consultation response was published on 15 June 2022, comprising the following documents:

• the government response to the chapter of the consultation which covers guidance on ‘supporting local preparation’
• revised guidance on ‘supporting local preparation’, to replace chapter 23 in the CASS guidance
• allocations for financial year 2022 to 2023 charging reform implementation funding

This publication represents the second part of the consultation response. This document provides the full government response to the consultation on the ‘operational guidance to implement a lifetime cap on care costs’. It presents a summary of the feedback received from stakeholders on the operational guidance (‘Draft guidance: implementing the cap on care costs’), and the changes we are making to the guidance in response to that feedback.

Table 1: key aspects of the ‘implementing the cap on care costs’ guidance

Chapter	Summary
Cap on care costs – overview chapter	The chapter ‘Cap on care costs’ gives an overview of the new capped system. It describes how people register for the cap, what counts towards it, what happens when a person moves to another local authority, as well as the rules when a person approaches and later reaches the cap.
Independent personal budgets	The chapter ‘Independent personal budgets’ (IPBs) covers what an IPB is and who it is for, how local authorities should calculate an IPB, how an IPB should be reviewed and revised, as well as how the spend of a person with an IPB should be verified.
Care accounts	The chapter ‘Care accounts’ explains eligibility for a care account, what information should be recorded in it, what information should be provided in a care account statement, adjustments to accrued costs, as well as questions around retention and portability of care accounts.
Consequential amendments in existing Care and Support Statutory Guidance (CASS) guidance	Other consequential amendments to the CASS guidance will also be required, particularly in the chapters on personal budgets, charging and financial assessment and the annex on choice of accommodation.

This consultation response is accompanied by a revised version of the guidance, which is published as a PDF alongside this document. Although we are publishing it as a standalone PDF at this point, we will integrate it into the existing CASS guidance ahead of October 2023.

When the draft guidance was published for consultation, certain aspects of the cap (in particular, what should count towards it) were still subject to Parliamentary scrutiny as part of the then Health and Care Bill (now Act). The act has now received Royal Assent. The amendments in the Health and Care Act 2022 will be commenced when the Care Act provisions to implement the cap are commenced, which is planned for October 2023.

We will keep the guidance under review and will continue to publish updates as necessary to support implementation. To inform this, we will be working closely with trailblazer local authorities, who will be implementing charging reform early and provide valuable insights to inform the national roll out, as well as other local authorities as they prepare for implementation.

Consultation exercise

The consultation on the statutory guidance was launched on 4 March 2022 and ran until 1 April 2022. The primary purpose of the consultation was to ensure that the operational guidance was clear and workable for local authorities who would need to use it in preparing for and implementing the cap on care costs. The department ran 8 consultation information sessions with stakeholder groups, the details of which are set out in the response to the ‘supporting local preparation’ guidance.

In order to inform our communication of the reforms and ensure that people drawing on care are able to understand the new processes that will affect them, the consultation document (but not the accompanying technical guidance) was also published in an easy read format on 14 March 2022. The easy read consultation was reopened from 23 May 2022 to 7 June 2022 to allow more time for responses to be submitted via that route, and to invite responses to an additional question on dispute resolution.[i]

Throughout the consultation and in considering and responding to the feedback, we have sought to collaborate as widely as possible with stakeholders to refine the guidance and our approach to implementation. We have worked with a dedicated group comprising local authority experts and representative bodies from organisations including the Local Government Association (LGA), Association of Directors of Adult Social Services (ADASS), National Association of Financial Assessment Officers and Solace. We also ran a series of 8 consultation engagement events tailored to different stakeholder groups including local government, care providers, voluntary sector and lived experience groups.

Channels such as GOV.UK, the Adult Social Care newsletter (cascaded to LGA, ADASS, Care Quality Commission (CQC)) and the Local Government Bulletin from the Department of Levelling Up, Housing and Communities were used to spread awareness of the consultation and encourage participation.

We are grateful to everyone who took the time to contribute to the consultation, and who has offered their expertise as part of this process.

Responses and analysis

We received 154 responses via the portal or by email and 7 responses to the consultation in easy read format. Of these, 84 responses were from local authorities and 5 from local authority representative groups.

Responses to the consultation were received from a range of respondents, including interested individuals, people with care and support needs, carers, local authorities, provider organisations, voluntary organisations, representative groups, user-led organisations, NHS and other public bodies and legal and financial sector organisations. A full list of respondents is included at Annex 1.

Statistical analysis could be conducted on a total of 126 responses (111 responses via the online portal and a further 15 email responses that could be coded; the additional 28 email responses provided general comments rather than specific answers to consultation questions and so were analysed separately). Of the 126 respondents in the statistical analysis, 95 (75%) described their capacity as on ‘behalf of an organisation’, 16 (13%) as an ‘individual sharing my professional views’ and 15 (12%) as ‘an individual sharing my personal views and experiences’. Seventy-five responses were on behalf of local authorities.

We have also held 6 working group sessions with our trailblazer local authorities and 4 working group sessions with local authority representative groups to help analyse responses and work with the sector to best improve the guidance for this publication.

Feedback from various additional stakeholder engagement events held as part of the consultation was also captured to feed into this final response document and inform the revised guidance.

In addition to this, we received 7 responses to the easy read consultation, which focussed on explaining the concepts of charging reform in a clear and simple way, which we will take into account in policy development. The main purpose of this easy read consultation was not to inform changes to the guidance, as that is technical guidance drafted specifically for use by local authorities, and the consultation was therefore not accompanied by an easy read version of the guidance. However, it is vital in the implementation of the reforms that we have effective methods in place to communicate the new rules to easy read users. The easy read consultation therefore focused on whether the key reform concepts are clear and understandable for those who draw on care and support. The written responses emphasised the importance to the reforms being communicated clearly for all those who draw on care and support, which we will take into account in improving our communication of the new rules in the future.

As the easy read question on dispute resolution did mirror the equivalent question in the full consultation, we have factored the responses to that question within this document.

Overall, consultation responses were supportive of the policy principles and the aims of the reforms. The feedback, however, suggests that some sections of the operational guidance need further development to ensure they are clear and workable. We have since worked with sector organisations to refine these sections in line with feedback.

In this document, we set out analysis of consultation responses and the government’s response for each section of the guidance in the order it appeared in the consultation document. We have undertaken qualitative analysis of the comments provided in free text boxes in each section. Each question was split into 2 parts: on clarity and workability. However, throughout the consultation, qualitative feedback on workability and clarity were often closely interrelated. Therefore, in this response we report key themes from the qualitative analysis on clarity and workability together for each topic.

Where applicable, we outline an overview of the most substantive changes incorporated in the guidance or next steps on supporting the sector going forward.

Summary of responses

As well as providing constructive and detailed feedback on the draft operational guidance, many of the responses to the consultation took the opportunity to comment more widely on the implementation of the charging reforms. Local authorities provided evidence around the challenges of delivery of the reforms, and concerns about the timescales for implementation. They also often voiced concerns about the workability of the guidance due to wider concerns around deliverability, including workforce, IT or funding of the reforms.

A local authority said:

LAs will have to enhance and develop operational business processes to accommodate the changes in the draft guidance and to increase capacity in case management. Whilst there is some scope for altering workloads the need to increase the number of trained social work/social care practitioner and financial assessment staff is inevitable. This relates mainly to practical frontline case management and preparedness to deal with new cases from information and advice, social care assessments, financial assessments, billing, and query resolution.

Where concerns were specific to a given section of the operational guidance, they are described in this consultation response. Feedback on these wider aspects of supporting local authorities for implementation is covered in more detail in the consultation response published on 15 June on this part of the guidance.

Where respondents expressed concerns about aspects of the guidance that lacked clarity, many provided constructive suggestions on clarifications that could be made to aid understanding. These have been reflected throughout the revised guidance wherever possible.

To improve clarity, we have additionally added further case studies as requested. We intend to add further case studies in due course as we refine the guidance ahead of October 2023.

A consistent theme was that local authorities felt that some aspects of the guidance were not prescriptive enough in nature. As a result, they voiced concern that they could find themselves at risk of making decisions which could place them at financial risk or be open to legal challenge. In some instances, we have given greater clarification where this was appropriate. However, in other instances – such as in the section on independent personal budgets – we have adhered to a principles-based approach which leaves it to local authorities to determine, within those principles, their own local approaches.

It is right, and in keeping with the approaches in the existing CASS guidance, that local authorities retain a degree of discretion in how they manage their local care systems. There needs to be flexibility for local authorities to set policies and processes which work for their local markets and circumstances, as well as enabling them to offer personalisation for those who draw on care. We will, however, clarify the principles and policy intent in such sections, to address any unhelpful ambiguity which may increase the risk of challenge or financial risk which local authorities have raised concern about.

We are working with trailblazer local authorities, who will implement charging reform early, to help shape the government’s approach to implementation and test key aspects of the reform, including workability of the operational guidance. The initiative will generate valuable evidence and insight to help monitor progress, identify challenges and improve understanding of how the reforms will work in practice. As we do this, and continue to engage with the sector as it prepares for full implementation, if it appears that further detail needs to be added in these sections, we will refine the guidance further.

Section 18(3)

The consultation included a question about how central and local government and providers could best ensure a smooth transition for the implementation of section 18(3) in relation to residential care. The government found the responses to the consultation very helpful in supporting its thinking for how to smooth the introduction of section 18(3). This response sets out the way in which section 18(3) will be introduced, taking this feedback on board.

Feedback on this section highlighted a range of challenges in this area and pointed to 2 factors:

• uncertainty over the number of individuals who might choose to use section 18(3)
• the impact which an abrupt transition could have on providers, local authorities and users

In response to this feedback, and our wider engagement with sector partners, the government will be introducing a transitional period for section 18(3). This approach will give local authorities and providers greater certainty regarding take-up of this policy, and will prevent them from experiencing this as an abrupt change. People in greatest need of local authority commissioning will still have access to this from October 2023 through the extension of the means test, while those funding their own care will gain access to section 18(3) in stages, starting with those who are newly entering care homes. Greater detail is provided in section 2.7 of this document.

First party top-ups

Responses to this section, and consequent engagement with sector stakeholders, suggested that further consideration of this section of the guidance is required. Whilst the government still intends to remove current restrictions in the regulations on first party top-ups that extend past those for third-party top ups, we will be publishing specific guidance on first party top-ups later in due course (as part of an update to ‘Annex A: Choice of accommodation and additional payments’ in the CASS guidance), once we have undertaken further engagement and discussions with sector experts. Further detail about the responses received, and the next steps we are considering, are contained in section 2.6 of this document.

Next steps

The government recognises the challenging timescale for implementation and the significant work required locally. To support local delivery, the Department of Health and Social Care (DHSC) is currently working with local authority experts and representative bodies to develop a support model, as well as providing implementation funding to enable local authorities to prepare and plan. Further details on next steps in response to overarching themes in consultation responses are also set out in the first part of the consultation response on ‘supporting local preparation’.

The government intends to consult on a proposed approach to distribution for 2023 to 2024 funding later this year. Funding will be distributed via section 31 grants.

Once the full legislative framework begins to take force in October 2023, it will leave the existing Care and Support regulations largely unchanged. There are, however, several regulations which will require changes. Our intention is to make these changes to regulations in autumn 2022, to come into effect in October 2023. These regulatory changes include:

1. The Care and Support (Charging and Assessment of Resources) Regulations 2014 will be amended to extend access to means-tested financial support.

2. Amendments to the Care and Support and After-care (Choice of Accommodation) Regulations 2014 to provide greater flexibility in allowing for first person top-up payments. Details of these changes will be explained in more detail when the annex on first party top-ups is published in due course.

3. Amendments to the Care and Support (Deferred Payment) Regulations 2014 to allow for the revised lower and upper capital limits and introduction of the cap on care costs. These changes will increase the eligibility threshold of Deferred Payment Agreements, ensuring more people are not forced to sell their home to pay for care in their lifetime.
4. Amendments to the Care and Support (Direct Payments) Regulations 2014 to allow for direct payments to those in residential care in all local authorities.

Full response by question

What counts towards the cap and how this is calculated

The new chapter ‘Cap on care costs’ describes what counts and does not count towards the cap, and how local authorities should calculate this.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

111 respondents answered this question. Of those that responded:

• 8% answered strongly disagree
• 28% answered disagree
• 14% answered neither agree or disagree
• 36% answered agree
• 5% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

112 respondents answered this question. Of those that responded:

• 10% answered strongly disagree
• 49% answered disagree
• 19% answered neither agree or disagree
• 21% answered agree
• 2% answered strongly agree

Key themes

36% of respondents disagreed that the guidance was clear in explaining what does and what does not count towards the cap, and how local authorities should calculate this, and 59% disagreed that it was workable. Respondents made helpful suggestions on which aspects of the guidance required further clarification.

Many written responses commented on the concept of daily living costs (DLCs). Responses indicated that the purpose of DLCs to level the playing field between those who receive home care with those living in a residential care setting, when metering towards the cap, was not made clear enough in the guidance. For example, some respondents wrongly interpreted the guidance on DLCs to suggest providers were now restricted to charging the food and accommodation related component of someone’s care and support package at a nationally set level.

A care provider representative organisation said:

We are confident that the government does not intend to imply that providers must charge around £200 per week for the costs of accommodation and other non-care parts of a care and support package, however, the current phrasing could imply that.

Others queried the level at which DLCs are going to be set (a national notional amount, the equivalent of £200 per week in financial year 2021 to 2022 prices). Respondents asked for support in helping explain the concept and level of DLCs to both providers and people drawing on care to mitigate the risk of queries and challenges.

Where a person has reached the cap, the draft guidance set out that a person will continue to be responsible for DLCs ‘where they can afford them’. Many respondents asked for further detail on the exact charging rules.

One local authority said:

If people were not able to meet daily living costs from their income, would they need to make up the difference from their assets, even after they reached the cap?

Several responses picked up on wording where needs met by a carer were described as being ineligible care needs under section 10 of the Care Act.

A care user representative organisation said:

[In the operational guidance] there seems to be some confusion between ‘eligible care needs’ and ‘care costs which meet eligible care needs’. Support provided by carers is not an eligible care cost for the purposes of the care cap and this could be stated in the simplest terms making it easy for everyone to understand.

Written responses on this question confirmed that the guidance was clear in communicating that a person whose care the local authority is arranging would continue to meter towards the cap even if their care charges remained unpaid. Many local authorities however raised concerns about people reaching the cap with significant levels of debt as a result.

One local authority said:

Cost accruing towards the cap even without payment to the local authority of sums due, is likely to act as a disincentive to payment of contributions. Debt collection is already an extremely sensitive and challenging issue for local authorities.

Written responses by local authorities as well as people drawing on care saw the risk of increased disputes around local authority decisions on eligibility and the cost of care and support to meet eligible needs.

One local authority said:

We do believe the public expectations on things like daily living costs and accrued costs being based on contributions will be adrift from the guidance. Therefore,
strong communication will be needed to ensure it is widely understood.

Wider comments received on workability of the guidance commented on the resources associated with additional assessments and the preparation of a person’s personal budget or independent personal budget (IPB) to set out what meters towards the cap.

One local authority said:

Although the guidance is clear, the level of resources needed to implement this change is extensive and the adult social care sector is already struggling to recruit and retain the workforce required.

Government response

A range of amendments were made in response to the many helpful comments received.

In particular, we have expanded the guidance regarding the charging rules relating to DLCs in response to the specific queries raised. The guidance now sets out more clearly that once a person has reached the cap, DLCs should be charged based on the existing means test rules and treatment of capital and income. This means a person with assets below the upper capital limit of £100,000 can receive financial support towards their DLCs where they have reached the cap.

In response to calls for clearer guidance around care needs met by a carer, the guidance now more accurately explains that eligible care needs remain as such regardless of who meets them. However, it is still the case that only the costs of meeting eligible care and support needs counts towards the cap. Therefore, since the local authority is not required to meet needs that are met by a carer, the costs of care needs met by a carer do not count towards the cap.

In addition to changes made in the operational guidance, the government recognises the need for national support for local communications to ensure that the rules on what counts towards the cap are easy to understand for people drawing on care. As set out in the first part of the government’s response to this consultation, the government is looking to develop a tailored provider guide to help providers in interpreting aspects of the operational guidance that are most relevant to them.

In response to concerns of local authorities around debt recovery and the rules around metering disincentivising payment, the government intends to further monitor debt accrual as part of the monitoring and evaluation strategy for charging reform, and will seek to further modify guidance if this becomes a significant issue.

Cap on care cost: wider comments on draft chapter

The new chapter ‘Cap on care costs’ also covers how people start metering towards the cap, what happens when a person progressing towards the cap moves to another local authority, and what happens when a person approaches and later reaches the cap.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

111 respondents answered this question. Of those that responded:

• 8% answered strongly disagree
• 25% answered disagree
• 18% answered neither agree or disagree
• 44% answered agree
• 5% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

109 respondents answered this question. Of those that responded:

• 10% answered strongly disagree
• 35% answered disagree
• 28% answered neither agree or disagree
• 35% answered agree
• 3% answered strongly agree

Key themes

A third of respondents disagreed that other aspects covered by the new chapter ‘Cap on care costs’ were clear, and 45% disagreed that it was workable.

Respondents made helpful suggestions for clarification needed in the section of the guidance explaining how and when people would start metering towards the cap. In response we made several changes to the guidance to improve clarity, for instance confirming that a person does not have to give explicit consent to start metering towards the cap, but anyone has the option to opt out of metering if they wish.

The draft guidance confirmed that where a needs assessment is delayed, a person can start metering from the point that they requested a needs assessment, or that the local authority became aware they needed one. In response to concerns about disputes, the guidance now more clearly defines ‘the local authority becoming aware’ as being the result of a referral by a third party. Local authorities should also confirm receipt of a request or referral. Commenting on workability, many respondents pointed out the communication challenges in response to people approaching the local authority for a needs assessment, and the administrative burden of backdating.

One local authority said:

We can envisage circumstances in which someone might claim that a brief past interaction with local authority staff, perhaps several years previously, should have caused the authority to identify that the person might need a needs assessment.

The draft guidance set out what should happen when a person metering towards the cap moves to another local authority. Several responses identified specific circumstances that were missing from the draft guidance. New clarifications within the guidance state that in the unlikely event a person does not allow the first local authority to share information with the second local authority, the second local authority may have to consider restarting accrued costs, and that this possibility should be clearly communicated to the person. A new case study also illustrates what should happen when, following a long gap in receiving care, a person has moved local authority. In this context, some respondents pointed out the benefits of a centralised national care account system, and others reiterated the importance of IT readiness to make sharing of information from care accounts between local authorities workable (see 2.9 on care accounts).

One local authority said:

What permission is needed from the customer to request information from another local authority if someone moves into another LA area? We already have situations where consent is refused and if this happened for care account purposes, the customer could be disadvantaged in their accrual against the cap.

Several respondents asked for further clarity on the rules for direct payments in the new system. In describing the rules when a person approaches and reaches the cap, the draft guidance now more clearly explains that upon a person reaching the cap, a person may choose to have their needs met through a direct payment and maintain the contract with their existing care provider themselves, so long as the request complies with the conditions set out in the Direct Payment regulations.

Government response

As set out above, several changes were made in the operational guidance to respond to feedback received, and we will work with trailblazers to monitor whether changes made to date are sufficient.

On direct payments, to further enhance choice in how people meet their needs, and in particular where a person is reaching the cap and wishes to retain their existing contract with their care home, the government intends to lift restrictions on the use of direct payments for residential care. We will work with stakeholders to support implementation and share best practice, including any interaction with top-ups, and to further understand current barriers to the use of direct payments for people drawing on domiciliary care.

The government recognises the importance of supporting local authority-led communication in managing expectations of people approaching the local authority to meter towards the cap, and we are considering how we can support local communications, including providing tailorable assets, and will be engaging with sector representatives on this.

Calculation of independent personal budgets

The new chapter ‘Independent personal budgets’ provides advice to local authorities on how to approach the calculation of an independent personal budget (IPB) and what principles to follow in doing so.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

112 respondents answered this question. Of those that responded:

• 9% answered strongly disagree
• 26% answered disagree
• 28% answered neither agree or disagree
• 35% answered agree
• 3% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

109 respondents answered this question. Of those that responded:

• 7% answered strongly disagree
• 35% answered disagree
• 38% answered neither agree or disagree
• 17% answered agree
• 3% answered strongly agree

Key themes

An independent personal budget (IPB) sets out the amount that a local authority would pay to meet the eligible care and support needs of a self-funder who is arranging their own social care. It is this amount, minus DLCs where applicable, that will accrue towards the cap. The draft guidance provided advice to local authorities on how to determine what it would have paid to meet a self-funder’s needs, and so how it should set an IPB.

Around a third of respondents disagreed that the guidance to local authorities on how to approach the calculation of an IPB and what principles to follow in doing so was clear. 42% disagreed that it was workable.

The guidance explained that a local authority is not required to produce a care and support plan in setting an IPB, and that the process of setting an IPB should be ‘proportionate’ while taking into account the complexity of a person’s needs. However a local authority determines an IPB, the amount listed should reflect a realistic cost of quality provision that the local authority has a reasonable expectation of being sufficient to meet the person’s eligible needs. It also advised that a local authority should utilise its most relevant up-to-date cost data, such as the cost of equivalent care packages for the people whose needs it had recently been meeting, and that it may draw an average across these where appropriate.

A number of respondents requested more detailed advice and more specific and descriptive methodology. It was suggested that, without this, it would be difficult for IPBs to be calculated in a consistent manner across local authorities, and that local authorities would be open to an increasing number of disputes.

One local authority said:

[T]he discretion of the LA could result in different levels of service and decisions between LA[s]… The guidance needs to be clarified and a simple framework provided to demonstrate how LAs determine what it would cost a LA. The guidance is currently confusing referring to ‘real cost’, ‘dummy purchasing’, ‘normal price’ and ‘use of average cost’ at various different points… There is a huge risk of variation, challenge and lack of transparency.

Other common queries with respect to the calculation of IPBs included:

• local authorities asked whether they should seek to minimise all variation between IPBs set in their area, and whether this is even possible given that, for example, the cost of home care will vary depending on a person’s location within the authority
• local authorities asked for further detail on the circumstances under which a dummy purchasing process might be required and what this entails
• what level an IPB should be set at if a local authority identifies multiple care arrangements that would be sufficient for meeting a person’s needs
• what level an IPB should be set at if a person makes a care arrangement that is different to that the local authority would have chosen

One local authority said:

There is great variability even within a town or borough on cost dependent on where a home is and or what care agencies are available in that area. […] For example there maybe a 10% to 20% cost discrepancy between an inner and out of town agency. Equally there are discrepancies by distribution of homes.

The guidance also set out an expectation that local authorities should ‘pay due regard’ to the results of cost of care exercises. A number of respondents were unsure as to how local authorities can do so in setting IPBs whilst also ensuring that IPBs reflect ‘real costs’, given that funding to support local authorities paying a fair cost of care (FCC) has only recently been introduced.

A local authority representative group said:

What happens in the case where the FCC is not being paid? What ‘due regard’ should be applied? Is the department saying that due regard must be to the FCC rate or the rate the LA is paying? This should be clarified as ‘due-regard’ has legal connotations.

Additionally, many respondents expressed that it was unclear when a local authority must prepare a care and support plan in determining the level at which an IPB would be set. More broadly, there was also concern that, while there is no statutory requirement for local authorities to produce care and support plans for those with an IPB, it is nonetheless likely that a local authority would be unable to avoid producing one to determine likely costs.

One local authority said:

Although the local authority is under no legal obligation to develop a care and support plan for [an] IPB, it is likely to be required, as will be needed to evidence calculation of care costs when challenged.

Some respondents noted that the guidance underplays the difficulties involved in setting IPBs, especially for those in domiciliary care, and that this will have a consequential and concerning impact on a local authority’s staffing, resources and workload.

One local authority said:

We consider that the calculation IPBs will be far more complex than the guidance acknowledges where the person is not in a care home. This conclusion is based on the issues we currently have calculating PBs where the person chooses to receive their PB as a direct payment, for example, same level of needs can result in varying level of care – for example, difference between the cost of PAs compared to homecare – and how will this meter against what they pay.

Another local authority said:

What is clear is the resource demands of implementing IPBs across the volume of self-funders in the [authority] will be huge and staffing up our response to this, and the costs that will be incurred just for workforce will also be huge.

Government response

The absence of a standardised prescriptive national methodology to calculate IPBs (for example, the use of an average over relevant existing personal budgets in all cases) is intended to enable a local authority to take a proportionate and personalised approach to setting IPBs. Considering the feedback from the consultation and following further discussion with sector stakeholders, the government is still content that this is the correct approach, and that a one size fits all methodology would not be workable. Nonetheless, we recognise that there are additional clarifications we can make and further details we can add to better assist local authorities.

Firstly, we have repeated or cross-referred to relevant information that appears elsewhere in the guidance information, in order to minimise queries that may have arisen as a result of the chapter being read in isolation. For example, we have repeated from the ‘costs that do not count’ section in chapter 1 ‘Cap on care costs’ that the costs of services that are already being provided to the person under other pieces of legislation do not count towards the cap and therefore should not be incorporated into the IPB.

Secondly, since some respondents’ concerns appear to have arisen due to a lack of clarity, we have addressed this by setting out information in a more coherent manner and adding further clarifications and case studies. For example, we have separated out the details on (i) how a local authority assesses what care and support arrangements would be sufficient for meeting a person’s needs from (ii) how a local authority should determine what it would pay for those arrangements.

With respect to (i), we have explained that local authorities can utilise the full range of existing information they may have available, including doctors’ reports, medical diagnoses and, for those already in receipt of care and support, their current provider’s care and support plan. These can then be viewed in the context of the person’s needs assessment to help a local authority determine what care would likely be needed without needing to produce a care and support plan. We have also described the kinds of factors that might influence a local authority’s decision on whether it would be appropriate to create a care and support plan (although there is no statutory requirement to do so) and provided an example within a further case study.

With respect to (ii), the guidance now explicitly states that whatever a local authority’s approach, the IPB should reflect what the local authority judges that it would expect to have paid for the care arrangement if the person had chosen to ask it to meet their needs. This means that if a person in fact meets their needs through a different type of arrangement, it is the cost of the arrangement the local authority would have chosen that forms the basis of the IPB.

The guidance also expands on the cases where a local authority might decide to ‘dummy purchase’ care and what this might involve, and includes dummy purchasing within the new case study. Furthermore, we have explained that if a local authority identifies multiple arrangements that would be sufficient to meet a person’s eligible care and support needs, the local authority is entitled to base the IPB on the cheapest arrangement sufficient for meeting those needs.

To respond to the queries concerning variations in cost, we have clarified the kinds of factors leading to variation that should be reflected in IPBs: for example, whether the setting in which the person would likely receive their care is rural or urban, mirroring how the local authority would reflect those factors in the personal budgets it sets. We have also explained that averaging might be appropriate where the most recent personal budgets are not indicative of the usual commissioning rate because of, for example, a block contract, or the absence of available beds.

Lastly, we have removed the sentence within the ‘Sufficiency’ section which suggested that local authorities should ‘pay due regard’ to cost of care exercises. Instead, we have inserted new sentences within the ‘Calculating the IPB’ section which explains that as the Market Sustainability and Fair Cost of Care Fund is introduced, the amounts local authorities pay for care will become increasingly reflective of a fair and sustainable rate for care, and so, in ensuring that IPBs reflect real costs, over time, IPBs should increasingly reflect a fair rate for care.

Independent personal budgets: wider feedback on draft chapter

The new chapter ‘Independent personal budgets’ also covers:

• what an IPB is and who it is for
• needs assessments for self-funders
• how an IPB should be reviewed and revised
• how the spend of a person with an IPB should be verified
• what happens when such a person moves to receiving local authority support

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

111 respondents answered this question. Of those that responded:

• 4% answered strongly disagree
• 32% answered disagree
• 23% answered neither agree or disagree
• 40% answered agree
• 2% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

107 respondents answered this question. Of those that responded:

• 11% answered strongly disagree
• 36% answered disagree
• 34% answered neither ‘agree or disagree’
• 16% answered agree
• 3% answered strongly agree

Key themes

In addition to advising local authorities on how to set IPBs, the chapter on IPBs also covered who is eligible for an IPB; how a person with an IPB might be required to meet their needs as well as how a local authority should administer IPBs and how they would operate. As the consultation included specific questions on verification and disputes, the details the guidance included on those aspects, and the feedback received on them, will be discussed in sections 2.5 and 2.9 of this document.

36% of respondents disagreed that the guidance on these areas was clear and 47% disagreed that it was workable.

The guidance explained that a person with an IPB is not required to meet their needs in any particular way in order to progress towards the cap. However, they must have nonetheless met their needs in some way other than through an informal carer. The guidance also detailed: how a local authority should communicate an IPB; how IPBs should be reviewed and revised; and the obligations a local authority has once a person becomes eligible for support.

There were a number of points where many respondents requested greater direction or clarity. For example, local authorities frequently set out in their responses that it would be useful to be provided with an example of what ‘best practice’ might look like in communicating an IPB, and that this would help the local authority to minimise the number of disputes and complaints.

One local authority said:

People are unlikely to understand that only eligible care needs count towards the cap given the messaging on these proposals and that will lead to social workers and finance assessors needing to have difficult conversations. Essential to the delivery of this will be clear national communication before, during and after the introduction of this policy change.

Some local authorities were concerned that once a person is issued with an IPB, it will likely become known to them – if communicated properly – that the local authority may be able to commission them a care package at a lower rate. This could subsequently lead to further uptake of section 18(3) and thereby leave a local authority short of affordable placements, meaning that it would need to commission care at higher rates.

Concerns were also raised about the clarity or workability of terminology used. For example, some respondents were unsure what was meant by ‘dummy purchasing process’; others objected to the use of the phrase ‘person with complex needs’ as it falsely suggests that some care receivers have complex needs and others do not. Some respondents found the term ‘IPB’ unhelpful due to the fact that it is too similar to ‘personal budget’.

One local authority said:

We are concerned that the way these new instruments have been named will cause confusion across the health and social care landscape.

One of the biggest concerns related to people currently in receipt of expensive care packages – particularly those in care homes – moving to local authority support once they hit the cap, or the upper capital limit, or make use of section 18(3). Many local authorities raised concerns that, since it is difficult on grounds of welfare to move a person once they are resident in a care home, local authorities would be required to support the person in that more expensive setting once they become eligible for local authority support. Some respondents requested further clarity over which kinds of scenarios might require a top-up payment and what local authorities’ rights were in refusing these, as well as in preventing a person taking out an expensive care package prior to hitting the cap or the upper capital limit.

One local authority said:

We would welcome further guidance being made available nationally around the risks to people’s placements if they chose to receive care at a much higher rate than the agreed Council rate, and they are not willing or able to pay the element that is above the Council’s threshold once they hit the care cap and the public guidance and messaging needs to be clear on this point.

Aside from these themes, a number of queries arose with respect to what might trigger the review and revision of an IPB, what to do if a person refuses to comply with a request for information at any point – for example, at financial assessment, and whether providers are under an obligation to keep local authorities updated of any change in need. Relatedly, local authorities were concerned about the additional workload and disputes that review and revision of IPBs might create.

One local authority said:

The guidance could provide more clarity on the response if clients refuse a financial assessment. Para. 2.42 refers to a change in the market price. There could be more clarity on whether an increase in local authority fees paid to providers automatically triggers a review in the IPB to reflect this change.

Government response

We have listened carefully to the above points and have made a number of clarifications in response.

To further assist local authorities with the communication of IPBs, we have added to the guidance that best practice includes managing the person’s (or their relatives’ or representatives’) expectations by stating from the outset the specific purpose of an IPB. That is, that an IPB states the costs of those services that the local authority deems as sufficient for meeting eligible care and support needs only. We have also included details of scenarios that may account for a difference in cost between the IPB and what the person drawing on care pays – such as the person currently paying for services that go beyond the meeting of their eligible needs, or which meet their needs differently to the way in which the local authority would. We have set an expectation that where this is the case, the local authority should communicate that this may account for a difference in cost.

With respect to issues around terminology, we have further clarified what might be involved in ‘dummy purchasing’. Likewise, the term ‘person with complex needs’ has also been removed and replaced with phrasing that better reflects that all care receivers’ needs have a level of complexity. The term ‘IPB’ is written into primary legislation and cannot be changed. However, we have added to the guidance that IPBs are similar to personal budgets in the respect that both set out the amount by which a person drawing on care moves towards the cap. The similarity between the 2 names is intended to reflect this equivalence.

We have added additional detail on what a local authority should do if a person newly accessing local authority support wishes to utilise services above and beyond what the local authority would offer, or who prefers care in a different (more expensive) setting than that which the local authority would offer.

We have also clarified the kinds of scenario when top-ups may be required, and where the local authority would not be permitted to charge one, and more clearly refers the reader to Annex A of the CASS guidance for further advice. For completeness, a new paragraph also provides guidance to local authorities on people moving from an IPB to a personal budget.

Further clarifications on the review and revision of IPBs, as well as obligations regarding data sharing between local authorities and providers have also been made.

Metering and adjustments to accrued costs

The new chapters ‘Independent personal budgets’ and ‘Care accounts’ describe a need for local authorities to verify the spending of those who self-fund their own care. They also outline when a local authority has the option to adjust accrued costs retrospectively.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

107 respondents answered this question. Of those that responded:

• 9% answered strongly disagree
• 21% answered disagree
• 23% answered neither agree or disagree
• 46% answered agree
• 1% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

107 respondents answered this question. Of those that responded:

• 13% answered strongly disagree
• 39% answered disagree
• 26% answered neither agree or disagree
• 17% answered agree
• 0% answered strongly agree

Key themes

47% of respondents agreed that the guidance on verification of spending and adjustments to accrued costs was clear, but only 17% agreed that it was workable.

The guidance had proposed that local authorities should complete some form of verification process to check that a person had purchased ‘formal’ care. The intent had been to ensure that people were not progressing towards the cap in circumstances where they were not purchasing any care or had their needs met by an unpaid carer. Whilst many of the consultation responses indicated that they broadly supported the concept of a verification process, some respondents had misinterpreted the purpose of verification to mean that a full auditing exercise should be undertaken of self-funders’ spend. This included a view that local authorities would need to check that a person’s spend matched the amount set out in their IPB and that money was being spent on suitable types of care and support to meet eligible needs.

One local authority said:

The guidance simply states that local authorities will have to [verify] spending but gives very little steering as to how – only a minor reference to checking bank statements or care contracts. Doing this does not show that money has been spent on appropriate care needs, or even that the money spent is attributable to the person.

A number of respondents wanted further clarity on what is considered suitable evidence of spend. This was raised particularly in relation to situations where a person sets up a private contract for another individual to provide care and support. Similarly, a number of questions were raised about how a local authority could verify whether a package of care and support was meeting a person’s eligible needs if it was a package that the local authority would not typically commission.

A health and social care professional said:

It will be very important to consider what is evidence of spend – for example where a family member is being employed privately as a PA. Will there be an expectation that this is via an employment contract (as would be required for a Direct Payment) or would we be expected to consider evidence such as transfers of money to a private account?

Some local authorities felt that the guidance was particularly unclear about when adjustments to accrued costs could be made. Firstly, the suggestion in the draft guidance that adjustments could not be made where there are ‘minor discrepancies’ between a person’s spend and the amount set in their IPB, was considered to be open to interpretation, leaving local authorities open to challenge. Similarly, some respondents suggested that this concept was inconsistent with the proposal that adjustments to accrued costs could be made where eligible needs had only been partially met.

Secondly, the suggestion that adjustments to accrued costs should not be made to reflect changes of less than 6 weeks in duration was considered to be too restrictive and was too reliant on people alerting the local authority to changes in their circumstance.

One local authority said:

While we agree with the general principle that local authorities would be wise to operate some kind of de minimis policy to avoid excessive administrative burdens, we think that this guidance is too rigid to take account of the variety of circumstances which might arise.

Wider comments received on workability of the guidance commented on the resources and administrative burden associated with the expectation on local authorities to undertake verification processes.

One local authority said:

This guidance will hugely increase the demand for reviews of both care and financial assessments. The expectations to review and verify this information create a huge administrative burden that will need an additional workforce.

Government response

In light of the feedback received about the workability of the verification proposal we have made significant changes to the guidance.

Most importantly, the guidance now re-emphasises that the policy intent is that self-funders with an IPB are able to meet their needs in any way that they choose. The Health and Care Act makes it clear that in order to accrue costs towards the cap, a person must have had their eligible needs met. Furthermore, needs that are met by an unpaid carer would not count towards the cap. As such, we set an expectation that verification should only be used to satisfy the local authority that a person is meeting these legislative requirements in order to progress towards the cap. Additionally, we have altered the guidance to set an expectation that verification processes should coincide with the requirement for local authorities to keep an IPB under review. Verification will provide local authorities with the opportunity to confirm that an IPB remains reflective of a person’s eligible care and support needs.

We have proposed that local authorities create their own processes when considering whether a person is sufficiently meeting their needs. To support them in doing so, the guidance sets an expectation that local authorities should consider best practice relating to direct payments, namely that:

• a person can meet their needs in any way they choose
• packages of care should be flexible and innovative
• a person may choose to arrange a package of care that the local authority would not typically commission

To address comments about suitable evidence, we have made it clear that local authorities should be as flexible as possible with the type of evidence that they ask for, but have set an expectation that proof of employment should be shown where a person has a private contract with an individual to provide care.

On adjustments to accrued costs, we have pared back the guidance to state that adjustments to accrued costs as recorded in a person’s care account can only be made in exceptional circumstances where accrued costs have been incorrectly recorded. This could either be due to an administrative error or because a person has accrued costs towards the cap without fulfilling the requirements of the act. For example, this may be because they have not met their needs, have had their needs met by a carer, or have had their needs met through another service such as continuing healthcare.

To address concerns that adjustments to costs should not be made for periods of changes of less than 6 weeks, the guidance now sets an expectation that local authorities should establish their own processes for how they will decide when adjustments to accrued costs are appropriate, with consideration for proportionality and the administrative burden of doing so.

We will work with trailblazer local authorities to consider how to operationalise the verification and review process, monitor the extent to which this works in practice and subsequently review any guidance where necessary.

First party top-ups

Amendments to Annex A of the CASS guidance, ‘Choice of accommodation and additional payments’, provide guidance to local authorities on when to allow and refuse first party top-ups.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

109 respondents answered this question. Of those that responded:

• 10% answered strongly disagree
• 28% answered disagree
• 24% answered neither agree or disagree
• 34% answered agree
• 4% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

109 respondents answered this question. Of those that responded:

• 9% answered strongly disagree
• 38% answered disagree
• 29% answered neither agree or disagree
• 23% answered agree
• 1% answered strongly agree

Key themes

Where a person’s care and support needs are being met by their local authority, the person has a right to express a preference for particular accommodation by arranging for the provision of accommodation of a specified type, including more expensive accommodation if the required conditions are met. Payments made to meet the additional costs of such choices are known as top-ups. Currently, first party top-ups (FPTUs), where the person drawing on care is able to pay themselves for a top-up, are only allowed in very limited circumstances. With many more people able to access local authority support under charging reform, including those who have reached the cap with significant assets, the government plans to lift existing restrictions in the regulations on FPTUs to support choice for those drawing on care.

The consultation set out the required amendments to Annex A, ‘Choice of accommodation and additional payments’, to allow for greater use of FPTUs, and additional guidance on when local authorities can refuse FPTUs if they are not satisfied the person is able or willing to pay.

38% of respondents disagreed the draft guidance was clear, and 47% disagreed it was workable. Written responses indicated significant concerns with several aspects of the draft guidance.

The draft changes to Annex A were published in a table and were paraphrased rather than set out in full. Some respondents stated that this meant they could not give detailed or critical comments on the expectations the guidance sets out for when a local authority should (or could), allow or refuse a FPTU. However, the majority of respondents did give full and thorough answers to these questions, to which we respond here.

Many respondents referred to issues with the existing, unmodified Annex A of the CASS guidance. In particular, responses suggested that the guidance needs to be clearer about what counts as a top-up and how it is defined (for example, whether top-up legislation could also apply in non-residential settings, whether it also covered self-funders with an independent personal budget making arrangements for more expensive accommodation, or whether top-ups could include ‘optional extras’ that don’t meet eligible needs). Some respondents also considered that the current guidance was unclear as to whether local authorities must always have a contractual responsibility for paying the top-up.

Respondents noted that because it is local authorities’ responsibility to have regard for a person’s wellbeing, it was in practice challenging to move a person who can no longer afford the top-up to a different accommodation. Therefore, extending the use of FPTUs carries a financial risk to local authorities that they may have to pick up the top-up where a person runs out of funds or more quickly depletes their assets.

The draft guidance and consultation included additional wording to make clear that local authorities should turn down FPTUs if they judge that the person paying the top-up is either unwilling or unable to pay for the likely duration of their care journey. However, respondents in general didn’t agree that this provided them with sufficient certainty. Many considered that local authorities would still be exposed to the risk of challenge if they refused a top-up without recourse to further national guidance defining when a local authority should be satisfied of a person’s ability to pay a FPTU.

One local authority said:

There is high likelihood in our opinion that this will give rise to disputes and challenges to LA decisions. This also puts LAs in a compromised position given that LAs have an interest in income from tariff income, has the onus of making judgments around deprivation of assets and on the other hand act in the best interest of the individual paying the first party top [up]. We believe further clarification should be available to guide LAs in decision making on deprivation arising from first party top-ups.

Some local authorities also raised more general concerns with whether FPTUs should ever be allowed where the person drawing on care is within the means test and is already receiving financial support from the local authority.

One local authority said:

It is not clear how an individual paying a first party top-up and the subsequent impact on capital thresholds reconcile. For example, if a first party top-up is deemed affordable, but then in years to come the capital threshold reduces to a level that requires state support, not only will the LA have to step in earlier than would otherwise have been the case, but the care and support is likely to continue at the higher rate.

Some respondents identified other specific aspects in relation to affordability of FPTUs not yet clarified in the guidance, in particular around treatment of capital and income before and after a person hits the cap, and the interaction with DLCs. In response, additional clarifications have been added to the new guidance chapter ‘Cap on care costs’. Once a person reaches the cap, they continue to be responsible for paying the top-up from their income and assets. In contrast to DLCs, FPTUs are not means-tested, meaning, where a person falls within the means test, they are not eligible for financial support towards the top-up component of their care costs, and chargeable assets below the new Lower Capital Limit of £20,000 are not protected.

On workability more broadly, local authorities identified a wide range of ways in which the opening-up of FPTUs would increase resourcing requirements through both assessments and handling of complaints. Local authorities stated that they need time to develop new processes and train staff to assess the affordability of a FPTU.

Whilst respondents agreed with the policy objective of removing current restrictions on FPTUs to facilitate choice, both user representatives and some local authorities were concerned that opening up FPTUs would lead to top-ups becoming a requirement in return for good quality care, a concern linked to adequate funding of the reform and the Market Sustainability and Fair Cost of Care Fund.

A membership organisation said:

The policy intention behind the introduction of top-ups is clearly to give people the choice of extras in their care provision, perhaps an additional service, beyond what is provided to meet their eligible needs, or perhaps a specific type of room. However, there is a danger that if the wider policy isn’t adequately funded, we simply create a new mechanism to cross-subsidise the state via top-ups.

Government response

We note that respondents have raised significant concerns about both the clarity of the existing Annex A and about how workable the changes to extend FPTUs will be, in particular around assessing if and when they should turn down a request for a top-up. Given this, we intend to use this consultation as an opportunity to more thoroughly reconsider and rewrite Annex A to better set out the policy intent. To avoid delaying publication of the rest of the updated guidance, the updated Annex A will be published at a later date.

The government still intends to lift the current additional restrictions on FPTUs. Local authorities should use the draft annex and revised guidance chapter ‘Cap on Care Costs’ as a basis for any initial preparation to implement the lifting of those restrictions, while we continue to work with local authority representatives to iterate this annex.

Requesting that the local authority meets needs

The consultation set out that, following the full commencement of section 18(3), local authorities will be under a duty to meet the eligible needs of individuals when requested, even where those individuals fund their own care, and should do so in the same way as they would meet the needs of any other individual whose needs they are meeting.

The consultation included 2 questions in relation to the commencement of section 18(3). The first one is below.

Question

The government recognises that the introduction of this policy for residential care users will be a significant transition for the adult social care market.

What are your views on how the government, local authorities and providers can make its introduction as smooth as possible?

Key themes

The government recognises that full commencement of section 18(3) will represent a significant change for the adult social care market and therefore sought the views of respondents on how to ensure as smooth a transition as possible.

Some responses suggested specific measures which government, local authorities and providers could take, and many articulated the wider challenges that the introduction of this policy could create. This feedback has been very helpful in developing plans for the implementation of section 18(3).

Many respondents were concerned about the sufficiency of funding for local authorities and the potential impact of section 18(3) on the adult social care market. Because there is evidence that people who organise their own care can pay more than a local authority would, section 18(3) could mean that more people who fund their own care become able to access lower rates than previously, changing the fees paid to providers.

One local authority said:

Funding will need to be sufficient so that the local authority can pay a fair price to providers for everyone that it arranges care for, given that these people would previously have paid a higher self-funder rate.

Some responses acknowledged the important interaction with the Market Sustainability Fair Cost of Care Fund, which will support local authorities to move towards paying providers a fair cost of care, to ensure markets are more sustainable. However, many were concerned that this may not be sufficient and pointed to it being difficult to know whether funding would be adequate to pay a fair cost of care when cost of care exercises have not yet been completed and when the scale of the pressure is not yet clear. Many were also concerned about the uncertainty regarding section18(3) take-up as we cannot accurately predict how many people will choose to use section 18(3).

One local authority said:

[T]here is a big unknown about the volume of self-funders who are likely to request [our local authority] to source care.

In light of this uncertainty, and the potential for large numbers of people who fund their own care to approach their local authority in order to access section 18(3) in October 2023, many responses raised concerns about the impact of the transition on local authorities’ administrative workload and therefore on their workforce requirements.

One local authority said:

It is unclear at this stage what capacity will be required to manage the initial implementation and then the on-going increase in work to maintain and review self-funders arrangements.

Another local authority said:

Availability and affordability of sufficient assessment and administrative capacity to deal with the additional workload is likely to be a big issue.

Some responses also raised concerns about the timing of the introduction of section 18(3). Some were concerned about operational readiness, while others were concerned by the cumulative effect of the different elements of reform on local authorities and providers. Several responses suggested that the cap on care costs and the changes to the means test should be implemented first, with section 18(3) to follow.

One local authority said:

It would be preferable for us to stagger the offer to source care for this market [self-funders] as a second/future phase of work rather than adopt a ‘big bang’ approach from October 23.

As well as outlining these concerns, many responses suggested measures which could make the introduction of section 18(3) smoother. These included local authorities using technology to ensure that administration is as low-friction as possible, and government ensuring that guidance on related areas of policy, such as top-ups and DLCs, support a sustainable market. The most consistent request was to ensure that communications regarding section 18(3) are as clear and timely as possible. Respondents were keen to see communications from both government and local authorities, and emphasised that providers and people using care services needed to receive consistent communications well in advance of implementation so that they understand what to expect and how to engage with the process.

Government response

The government is committed to supporting a fair and sustainable adult social care market, and section 18(3) is an important part of that, alongside the wider reforms and the Market Sustainability and Fair Cost of Care Fund. However, we acknowledge that section 18(3) is a significant change that could create challenges for local authorities, care providers and those who use care, depending on how it is introduced. We have therefore given careful consideration to the issues raised through this consultation and how government can mitigate these while realising the benefits of section 18(3) as widely and rapidly as possible.

While the issues raised by respondents were wide-ranging, they were all underpinned and exacerbated by the uncertainty which respondents pointed to regarding the likely take-up of section 18(3). Concerns around funding, workforce, administrative pressures and the timing of introduction are all significantly increased in a scenario in which many self-funders simultaneously choose to use section 18(3) in October 2023. We are therefore planning to introduce section 18(3) in a way that:

• avoids an abrupt overnight introduction which could impact on local authorities, care providers, and those who need care
• provides greater certainty about the initial take-up of section 18(3)
• ensures that those who need it most can have their needs met by their local authority immediately from October 2023
• ensures that section 18(3) is made available to all care users as rapidly as possible without creating risks around this transition

The government plans to introduce section 18(3) via a transitional period, starting in October 2023, during which local authorities’ duty to meet needs will be extended in stages (section 18(3) is already available to those receiving care outside of care homes). The transitional period will be reviewed after one year (October 2024), and completed after no more than 18 months (April 2025), at which point section 18(3) will be extended to all.

The transitional period will work as set out below.

1. Through the extension of the means test, those with the fewest assets will be able to have their needs met by their local authority from October 2023. Those who benefit in this way will not need to access section 18(3) in order to have their needs met by their local authority.

2. Those with the assets to fund their own care will gain the right to have their needs met by their local authority via section 18(3), in stages, starting in October 2023 with those who are entering care homes for the first time. It is right that these users, who are at the vulnerable moment of transitioning into residential care, benefit from the support of local authority care arrangement first.

3. Individuals who have the assets to fund their own care and whose needs are already being met in a care home will then gain access to section 18(3) at the end of the transitional period. This will be no later than April 2025.

While this approach means some people will need to wait longer than others to access section 18(3), it ensures that those with the greatest need are able to have their needs met by their local authority first. Those who are better able to wait, because they are already receiving support will then gain access at the end of the transitional period. Around 35% of self-funding care home users will be able to access section 18(3) by October 2024, at which point there will be a review to see if it can be extended further.

This approach gives local authorities and providers greater certainty regarding take-up of section 18(3) and will prevent them from experiencing this as an abrupt change. In order to support this, we have amended the eligibility criteria for section 18(3) set out in the guidance to state that as part of the first phase of implementation, to be eligible as a self-funder for the local authority to meet your needs the person must not be in a care home in October 2023, or have been residing in a care home in the 6 months preceding October 2023.

The second question in relation to the commencement of section 18(3) focused on the operational guidance on implementing it.

The new chapter ‘Cap on care costs’ contains a subsection ‘Requesting that the local authority meet needs’. This explains what happens when a self-funder requests that their local authority meets their needs.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

109 respondents answered this question. Of those that responded:

• 5% answered strongly disagree
• 22% answered disagree
• 22% answered neither agree or disagree
• 50% answered agree
• 1% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

108 respondents answered this question. Of those that responded:

• 15% answered strongly disagree
• 32% answered disagree
• 31% answered neither agree or disagree
• 20% answered agree
• 2% answered strongly agree

Key themes

Over half of all respondents (51%) agreed the guidance on requesting that the local authority meets needs was clear. However, there was more concern raised with respect to workability with only around a fifth of respondents (22%) in agreement that the guidance was workable.

A common theme across the responses regarding workability was a concern about the additional burden on local authorities and adult social care providers that full implementation of section 18(3) in October 2023 may generate. We have included a summary of these concerns and our response to them in the section on providing for a smooth implementation above.

In their written responses, many respondents asked for clarification of the role of local authorities in arranging care. In particular, local authorities asked for clarification as to whether the local authority was expected to commission care and receive payment directly from the self-funder, or whether they could broker an agreement for a self-funder with a provider, or whether both approaches are permissible.

Stemming from this concern there were requests for clarity in the guidance as to what payments a local authority would be expected to collect from a self-funder if the local authority commissioned their care. Respondents also requested examples of mechanisms to retrieve payments from self-funders; similar issues emerged in responses to the debt recovery section of the guidance.

One local authority said:

I don’t think the guidance [is] clear on who holds the contract in the scenario of a self-funder.

Another local authority asked:

Does the LA source and pay the provider and invoice the service user for their contribution, or do they arrange the care and the self-funder pays directly and hold a direct contract with the provider?

A number of respondents asked for further detail with respect to what services a local authority could commission on behalf of a self-funder once they have met the requirements to ask the local authority to arrange their care. In particular, respondents asked for clarity in the guidance as to how a local authority should act if a self-funder asks that they commission services on their behalf beyond or significantly different to what the local authority may have assessed are sufficient to meet their needs.

There were further requests to explain that there could be a variation in rates for a number of reasons, for example because different packages might be commissioned in different ways. Respondents also asked for more detail to be included as to how the fair cost of care work would link to the provision of care under section 18(3). Alongside this, a few respondents asked for more information as to what is expected from local authorities in meeting their duty to make users aware that the local authority can meet their needs.

Finally, there were a number of requests for further information in the guidance on the arrangement fee. Some respondents asked to what extent it linked to the existing arrangement fee process for domiciliary arrangements under section 18(3) and if it did not, whether there would be a standardised formula for calculating such a fee and asked for recommendations for making self-funders aware that they may be liable to pay such a fee.

One local authority said:

Further guidance on arrangement fees would be helpful to reduce time spent on explaining these at individual local authority level.

Government response

We have noted the concerns regarding workability and clarity of the guidance and reflected these in the redrafted guidance, as set out below.

Regarding the meeting of needs under section 18(3), the government has always intended that local authorities would have the same flexibility as when meeting the needs of users under any other section of the act. The guidance therefore makes clear that a local authority must not treat self-funding individuals whose needs the local authority is meeting differently to other groups, and we have now made clear that this principle also applies to how a local authority meets the needs of a self-funder as well as the rate at which they commission care. As such, we have provided clarification that a local authority may choose to meet needs in a number of ways including by commissioning care on a self-funder’s behalf or by acting as a broker between the self-funder and a provider, as is already outlined in the existing CASS guidance.

With regards to questions relating to debt recovery and the commissioning of care under section 18(3), the same processes will apply as relate to other care commissioned by local authorities for individuals whose needs they are meeting. These are addressed in the debt recovery section of the guidance, and we have signposted this within the guidance relating to section 18(3).

We have also provided clarity regarding the commissioning of services for section 18(3) users beyond, or different to, those identified by their local authority as being sufficient for meeting eligible needs. Where these relate to preferences for particular accommodation that costs more than what the local authority would pay, the guidance around top-ups contained at Annex A of the CASS guidance applies. Where these relate to other forms of provision, we have clarified that a local authority can choose to commission care beyond what it has assessed as sufficient to meet an individual’s eligible needs, but is under no duty to do so and may ask the self-funder to pay for these.

In relation to the commissioning of care at specific rates, the guidance states that rates may vary. This is currently the case for care commissioned by a local authority and will remain the case after the undertaking of cost of care exercises. The outcome of cost of care exercises is not intended to replace the fee-setting element of local authority commissioning processes or individual contract negotiation.

Finally, we have taken on specific feedback to provide clarity in the title of this section and provide signposting to further areas of guidance that might be helpful to read alongside this section. This includes existing guidance on brokering and arrangement fees.

Care accounts

The new chapter ‘Care accounts’ describes what a care account should record. It also explains what information should be provided in a care account statement, as well as how and when these should be issued. The government will provide further advice to local authorities following the completion of the discovery project.

Question A

To what extent do you agree or disagree that the draft guidance on these areas is clear?

108 respondents answered this question. Of those that responded:

• 6% answered strongly disagree
• 13% answered disagree
• 31% answered neither agree or disagree
• 43% answered agree
• 7% answered strongly agree

Question B

To what extent do you agree or disagree that the draft guidance on these areas is workable?

108 respondents answered this question. Of those that responded:

• 9% answered strongly disagree
• 32% answered disagree
• 41% answered neither agree or disagree
• 16% answered agree
• 2% answered strongly agree

Key themes

Only 19% of respondents disagreed that the guidance was clear on what a care account should record, what information should be provided in a care account statement, and how statements should be issued. However, when it came to workability many respondents raised wider questions about the proposed technology scope and queries regarding the outcome of the technology discovery phase (preliminary work to understand and create a specification for the IT requirements for care accounts); and 41% disagreed that the guidance was workable. Since the publication of the consultation, the government has published the technical specification for care account functionality setting out the required changes to local authorities’ IT systems ahead of October 2023.

In the written responses, many respondents questioned whether there would be a nationalised system of care accounts rolled out for local authorities or a degree of standardisation of IT specifications to ensure that the policy intent for care accounts was workable. Some responses voiced concern regarding the reliance on IT providers in implementing any new systems and asked for more detail on the outcome of the discovery project.

Regarding frequency of care account statements, many respondents expressed concerns that 6-monthly statements would be too frequent for care users, resulting for the most part in unnecessary statements for individuals due to minimal changes and also place a disproportionate burden on local authorities. Stemming from this there were also responses asking for clarity as to what may qualify as ‘a reasonable request’ for an interim statement before someone’s 6-monthly statement. In relation to workability, whereas some respondents raised concerns that 6-monthly statements may lead to significant peaks in workload and asked for support in mitigating this, others thought that with a reduction of frequency of statements these peaks would be more manageable.

One local authority said:

Statements are unnecessarily frequent for the majority of individuals in receipt of home care.

Some responses queried the ‘digital by default’ nature of care statements and whether these would be best suited to all care users. There were also requests for clarity that portals for people to access their care account online were optional and not a compulsory requirement for local authorities to implement.

Some written responses commented on what information must be included in a care account. There were mixed responses with respect to whether, if any, further information would benefit from inclusion in a care account. While some respondents asked that care account statements were expanded to cover specific areas such as deferred payment agreements and any record of debt, others suggested that there was benefit in care account statements remaining simple and concise to allow ease of use and focus on matters relating to accruing towards the cap.

A local authority representative group said:

The care account should be made simple and not confused with extra information about what happens when approaching the cap / what to expect etc. It should be a simple statement of account.

Lastly, respondents questioned the process for moving between local authorities and portability of the care account in these circumstances. In particular, there were requests for clarity as to what information from the care account the local authority the person is moving out of would need to provide to their new local authority.

Government response

We have listened closely to concerns regarding the frequency of care account statements and the potential administrative burden that may place on local authorities. As a result, we have changed the guidance to reflect that care account statements should be provided annually to care users, to align with annual reviews where applicable. We have also provided clarity on what may be deemed a ‘reasonable request’ for an earlier statement from a care user, ultimately noting that this is at local authorities’ discretion, but including illustrative examples of where it would be expected that a request was reasonable.

With respect to standardisation for care accounts a technology specification has been published alongside our updated guidance setting out requirements for IT suppliers with regards to a care account module. This care account module will be accessible within, or through, existing case management systems and will be required for the implementation of reforms from October 2023. The government is continuing to scope the opportunities for, and potential benefits of, further iteration of the care account module, including the potential benefits of a national system, as part of continuous development and refinement of functionality post-October 2023. However, the government has discounted a national care account system for October 2023. Following government-conducted discovery work, it has been identified that a national system is not achievable in the required timeframes. Additionally, the government has proposed that future digital opportunities in care, such as a national system and self-service tools can be explored. The government will do this in partnership with the sector to develop an improvement and innovation programme, using technology to support the wider charging reform implementation and local authorities more broadly.

Finally, across the chapter we have included a number of additional clarifications, for example, how the requirement to provide a copy of the care account can be met in the event an individual chooses to move across local authority boundaries.

Dispute resolution

Across the new chapters, the draft guidance advises that any disputes arising from decisions related to these reforms should be handled by individual local authority complaints systems.

Question

Do you agree or disagree that local authority complaints systems effectively resolve disputes about care and support?

108 respondents answered this question. Of those that responded:

• 12% answered strongly disagree
• 24% answered disagree
• 21% answered neither agree or disagree
• 36% answered agree
• 6% answered strongly agree

5 respondents answered the easy read version of this question. Of these:

• answered agree
• 2 answered strongly disagree

Key themes

The consultation sought feedback on the overall effectiveness of local authorities’ complaints systems. A slightly larger proportion of respondents agreed than disagreed that local authority complaints systems are effective at resolving disputes about care and support. Overall, 42% agreed, 36% disagreed and 21% neither agreed nor disagreed.

Many written responses also used the opportunity to comment on the anticipated impact that charging reform will have on both the number and type of complaints that a local authority receives. For clarity these 2 groups of responses have been separated out below.

Responses on the effectiveness of the local authority complaints systems currently

Within the written responses, a small number of respondents commented that local authority complaints systems are well established, robust and the right place for disputes to be resolved. Some respondents, however, noted that there is variation in the effectiveness of the current local authority complaint systems, and a few explained that complaints currently take too long to resolve.

Despite many respondents agreeing that local authority complaints systems work effectively currently, many were concerned about the impact that charging reform may have.

Responses on the impact of charging reform

The greatest number of written comments received in response to this question concerned an anticipated increase, due to charging reform, in the number of complaints local authorities receive. Comments also referred to an anticipated increase in local authorities’ workload. This was largely attributed to the increase in the number of people that will undergo different assessments and disputes that may arise from these. A small number of local authorities suggested that charging reform will increase the number of people with a high degree of resource and access to legal advice which may result in more challenges, including legal challenges, around assessment outcomes and the local authorities’ decision making more widely.

Some local authorities expressed concern about the additional resource, funding and training thought to be required to manage the volume of complaints following the implementation of charging reform.

One local authority said:

I would expect to see a significant increase in complaints associated with IPBs, care accounts, decisions about whether a care need is eligible or not and therefore which costs associated accrue or not toward the cap or not.

Several local authorities and care associations were concerned that where disputes relating to charging reform arise, this could lead to poorer experiences and outcomes for individuals if local authorities don’t have the capacity to respond effectively to these disputes. An increase in delays to dispute resolution, and the stress this could cause, was also mentioned.

A care association said:

It also creates the potential for a huge increase in workload for the local authority, which in turn suggests a large increase in spending, delays and decrease in desired outcomes for individuals.

Many responses raised concern that gaps, or a lack of clarity, within the charging reform guidance will increase the volume of complaints that local authorities receive, due to varying interpretations. Some areas of concern included the guidance around light touch assessments, IPB calculations, and more generally what is statutory and what is discretionary for local authorities.

One local authority said:

We are very concerned about the increase in complaints the new guidance is likely to create, and there are many gaps in the guidance that will allow different interpretations and ultimately to dispute.

Specifically in relation to the guidance on disputes in relation to charging reform, some respondents said that the guidance did not clearly set out how to address disputes that will likely arise from, for example, the setting of IPBs, eligibility decision or other financial disputes.

A small number of respondents were concerned about local authority complaints systems not being suitable for managing more complex, and often financial, disputes related to charging reform. This included complaints regarding the value of an individual’s IPB, or disputes around eligible costs and care needs. A small number of responses suggested that an appeals system could be an effective way to enable people to challenge care, support and financial decisions.

Government response

The quantitative responses illustrate that views on whether local authority complaints systems are effective at resolving disputes about care and support are fairly evenly split between those who agree current local authority systems are effective at resolving disputes and those who disagree. We will therefore continue to gather evidence of any challenges within existing local authority dispute resolution processes for local authorities or those who use their services.

We have taken onboard concerns raised by respondents and will address them in them in the following ways.

1. On the need for clearer operational guidance, changes throughout the operational guidance aim to improve clarity and reduce the risk of misinterpretation leading to an increase in disputes.

2. The government also intends to publish further case studies to be included in the guidance, which respondents noted were helpful to set expectations both for local authorities and people drawing on care.

3. On the anticipated increase in complaints to local authorities and the additional workload this would create, we will use learning from the trailblazer initiative to further understand the nature and the scale of the impact of charging reform on local authority complaints.

We believe that these actions will help to address the concern raised about poorer experiences or outcomes for individuals who use local authority complaints systems following the implementation of charging reform.

The existing complaints provision for local authority adult social care decisions is set out in regulations and these will continue to apply for complaints received about matters related to charging reform. Local authorities will therefore continue to have their own local policies and procedures for handling complaints. We will continue to monitor and gather evidence of any challenges for local authorities or those who use their services, including those related to charging reform.

Appendix: list of respondents

This list does not include responses to the easy read consultation where we did not ask whether responses were on behalf of an organisation. The following organisations responded to the consultation on the ‘Implementing the cap on care costs’ draft guidance:

• ABI
• Access Social Care
• ADASS
• Age UK
• Alzheimer’s Society
• Associated Retirement Community Operators
• Barchester Healthcare
• Barnsley Metropolitan Borough Council
• BASW
• Bath and North East Somerset Council
• Birmingham City Council
• Blackpool County Council
• Bolton Council
• Bournemouth Christchurch and Poole Council
• Bracknell Forest Council
• Brent Council
• Buckinghamshire Council
• BUPA
• Cambridgeshire County Council
• Care England
• Carers UK
• CASCAIDr
• Cheshire East Council
• Cheshire West and Chester Council
• City of Bradford Metropolitan District Council
• Cornwall Council
• Countrywide Tax & Trust Corporation Ltd
• County Councils Network
• Derbyshire County Council
• Devon County Council
• Disability Network Norfolk Group - Steering Group
• Durham County Council
• Ealing Council
• East Sussex County Council
• Essex County Council
• Financial Assessment Team, Dorset Council
• Forest Care Ltd
• Gateshead Council
• Gloucestershire County Council
• Hampshire County Council
• Hertfordshire County Council
• Hull City Council
• Independent Age
• Isle of Wight Council
• Just Group
• Kent County Council
• Kingston Council
• Kirklees Council
• Knowsley Metropolitan Borough Council
• Lambeth Council
• Lancashire County Council
• Leicester City Council
• LGA
• Liquidlogic
• Local Government & Social Care Ombudsman
• London Borough of Camden
• London Borough of Hammersmith and Fulham
• London Borough of Havering
• London Borough of Richmond upon Thames and Wandsworth Borough Council
• Manchester City Council Financial Assessment/Charging Team only
• Medway Council
• Mencap
• MHA
• Middleton Hall Retirement Village
• Milton Keynes Council
• NAFAO
• National Care Forum
• National LGBT Partnership
• Newcastle City Council
• Newham Council
• Norfolk Care Association
• Norfolk County Council
• North East Lincolnshire Council
• North Somerset Council
• North Tyneside Council
• North Yorkshire County Council
• Northumberland County Council
• Nottinghamshire County Council
• Oldham Council
• Oxfordshire County Council
• Peterborough City Council
• Portsmouth City Council
• Royal Borough of Greenwich
• Royal Borough of Kensington and Chelsea Council
• Royal Borough of Windsor and Maidenhead
• Royal British Legion
• Sense
• Sheffield City Council
• Shropshire and Telford & Wrekin
• Society of County Treasurers
• Society of Trust and Estate Practitioners (STEP)
• Solihull Metropolitan Borough Council
• Somerset County Council
• St Helens Council
• Staffordshire County Council
• Stockton Borough Council
• Suffolk County Council
• Surrey Care Association
• Surrey County Council
• Tameside Metropolitan Borough Council
• The Access Group
• The Orders of St John Care Trust
• The Relatives & Residents Association
• Thurrock Council
• Tower Hamlets Council
• Trafford Council
• Wakefield Council
• West Berkshire Council
• West Sussex County Council
• Westminster City Council
• Wiltshire Council
• Wokingham Borough Council
• Worcestershire County Council – Finance Directorate