Table of contents
- 1. The growing demand for and cost of dementia care skip to link
- 2. Recent social care funding reforms in England skip to link
- 3. Government white paper on social care: April 2023 skip to link
- 4. Reaction from stakeholders to the white paper and funding reforms skip to link
- 5. Read more skip to link
On 18 January 2024, the House of Lords will consider the following question for short debate:
Baroness Browning (Conservative) to ask His Majesty’s Government how they plan to create a parity of esteem between health and social care to address dementia.
1. The growing demand for and cost of dementia care
Dementia is syndrome—a collection of related symptoms—that result from damage to the brain caused by different diseases, such as Alzheimer’s. These symptoms vary according to the part of the brain that is damaged. Common symptoms of dementia include:
- memory loss
- difficulty concentrating
- finding it hard to carry out familiar daily tasks
- struggling to follow a conversation or find the right word
- being confused about time and place
- mood changes
Symptoms related to some forms such as vascular dementia can also include movement problems and stroke-like symptoms such as muscle weakness and temporary paralysis.
The number of individuals diagnosed with dementia in the UK is growing. The NHS estimates that more than 944,000 people in the UK currently have dementia. This includes one in 11 people over the age of 65. As the population ages, this number has continued to increase and it is estimated that the number of people with dementia in the UK will be more than 1 million by 2030, and 1.6 million by 2050.
This estimated trend is illustrated in the graph from Alzheimer’s Research UK below:
Because dementia costs are often associated with social care needs, as opposed to medical treatment, those with dementia are often required to fund the cost of their own care. While NHS medical services are free at the point of use for the patient, as the House of Commons Library has explained:
[W]hether a person is eligible for public funding support towards their adult social care costs in England depends on how much capital they have:
- Care home residents with capital in excess of £23,250 (the upper capital limit) are not eligible for local authority funding support.
- Care home residents with capital between £14,250 (the lower capital limit) and £23,250 (the upper capital limit) are eligible for funding support but must contribute a “tariff income” of £1 per week for every full or part £250 above the lower limit towards the cost of their care.
- Care home residents with capital below £14,250 are eligible for funding support and are not charged any “tariff income”—ie the capital is effectively completely disregarded.
While these limits are rigid for care home residents, local authorities have discretion to set higher (but not lower) limits for people receiving care in other settings (eg in their own home).
The value of a person’s main or only home is disregarded as capital when they are receiving care outside of a care home. For care home residents, their home can be counted as capital, but in certain circumstances it must be disregarded either for a time-limited period or permanently (eg if the home has been continuously occupied by the person’s partner since before they went into a care home).
When someone is eligible for local authority funding support they are still required to contribute their income towards the cost of their care, subject to any disregards (eg earnings).
Individuals are, however, allowed to retain a certain amount each week for personal expenses and (if applicable) household bills. For care home residents this is called the Personal Expenses Allowance and for people receiving care in other settings it is called the Minimum Income Guarantee.
Some people with social care needs can get this paid for by the NHS under NHS continuing healthcare, including those with long-term complex health needs, but not necessarily those with dementia.
Beacon, an independent organisation which gives advice on NHS continuing healthcare, explains:
Eligibility for continuing healthcare is based upon the concept of a primary health need, a concept for which there is no clear definition and which does not appear in primary legislation. If somebody has a primary health need then the totality of their health and social care needs will be over and above that which could lawfully be provided by social services and therefore the NHS has a responsibility to meet them. Social services are able to provide some health services but not where the overall needs are primarily health needs.
So what constitutes a health need? One might assume that a person suffering from dementia who is immobile and unable to wash, dress or feed themselves independently, who requires continence care and the administration of a medication regime by a trained carer would have a primary health need. This is not necessarily so and such needs are often seen as social or personal care needs, although we should be careful not to overgeneralise.
The Alzheimer’s Society also notes that it is difficult to assess how many dementia sufferers are currently claiming NHS continuing healthcare (CHC):
NHS England do not record diagnosis details in their statistics. We have no figures for how many people with dementia are successful in claiming CHC, compared to how many are turned down. We do know that applicants experiences can vary, with notable discrepancies from the length of process to the overall amount of successful claims in each geographical area.
The Alzheimer’s Society estimated that the cost of dementia to the UK is £34.7bn per year, which works out as an average annual cost of £32,250 per dementia sufferer. The Alzheimer’s Society suggests that two-thirds of this cost is currently being paid by people with dementia and their families, either in unpaid care or in paying for private social care.
Furthermore, the Alzheimer’s Society notes that dementia can be complex and involve symptoms that need tailored support, meaning care providers often charge a premium rate for dementia care. According to the charity, these extra costs are on average 15% more than standard social care, and they claim to have seen examples of it being up to 40% more expensive.
The government’s own estimates are that one in seven adults aged 65 face lifetime social care costs of more than £100,000 (resulting from conditions including, but not limited to, dementia).
Social care is a devolved policy area. The government has committed to reforming the social care funding thresholds in England. Reforms were initially planned for October 2023, but have now been delayed until 2025 as discussed below.
2. Recent social care funding reforms in England
On 7 September 2021, the government set out its new plan for adult social care reform in England. This included a lifetime cap on the amount anyone in England will need to spend on their personal care, alongside a more generous means test for local authority financial support.
The government intended that from October 2023 a new £86,000 cap would be introduced on the amount anyone in England will need to spend on their personal care over their lifetime. In addition, the funding thresholds would undergo significant revision:
[T]he upper capital limit (UCL), the point at which people become eligible to receive some financial support from their local authority, will rise to £100,000 from the current £23,250. As a result, people with less than £100,000 of chargeable assets will never contribute more than 20% of these assets per year. The UCL of £100,000 will apply universally, irrespective of the circumstances or setting in which an individual receives care, making it a much more generous offer than a previous proposal in 2015. The lower capital limit (LCL), the threshold below which people will not have to pay anything for their care from their assets will increase to £20,000 from £14,250.
The government also committed to reforms of the means test itself, including how people progress towards the cap and clarifying what will and will not count towards it.
However, at the autumn statement 2022, delivered on 17 November 2022, the Chancellor Jeremy Hunt announced that implementation of the charging reforms would be delayed by two years until 2025. As part of the statement the government said it would make available up to £2.8bn in 2023/24 and £4.7bn in 2024/25 to help support adult social care and hospital discharge. This included:
- £1bn of new grant funding in 2023/24 and £1.7bn in 2024/25, comprising:
- £600mn in 2023/24 and £1 bn in 2024/25 to help get people out of hospital and into care settings. The funding will be pooled as part of the better care fund.
- £400mn in 2023/24 and £680mn in 2024/25 which will be distributed through a grant ringfenced for adult social care (the adult social care market sustainability and improvement fund).
- Allocating funding for the now-delayed charging reforms through the social care grant for adult and children’s social care (£1.3bn in 2023/24 and £1.9bn in 2024/25).
- Allowing local authorities to increase the adult social care precept by up to 2% per year in 2023/24 and 2024/25.
The autumn statement 2023 “reaffirmed” the commitments made at autumn statement 2022 to make available up to £14.1 bn for the NHS and adult social care.
3. Government white paper on social care: April 2023
In April 2023, the government published ‘Next steps to put people at the heart of care’, a follow up to its 2021 white paper on social care. The 2023 document set out how the government intended to build on its previous commitments to ensure care was of “outstanding quality, personalised and accessible”.
The white paper detailed how £700mn would be spent to “continue the transformation” of the adult social care system in England, including investment in:
- improved access to care and support
- recognising skills for careers in care
- driving digitisation and technology adoption
- data and local authority oversight
- support to enable people to remain independent at home
- encouraging innovation and improvement
- joining up services to support people and carers
The government also published a timeline in which it hoped key milestones would be achieved.
4. Reaction from stakeholders to the white paper and funding reforms
Many stakeholders have welcomed the government’s commitment to amending the care funding thresholds and to provide additional money, yet some have questioned whether this additional spending was sufficient to meet current and future needs. For example, the Local Government Association said that the additional funding fell short of the amount it had called for to address the severity of the pressure facing social care.
Speaking specifically in response to the government’s 2023 white paper, the Alzheimer’s Society also criticised the lack of “much-needed cross-sector investment” at the same time as the delay of the implementation on the cap on care costs. It said a system-wide approach was required to achieve tangible improvements, including the integration of health and care services. The Alzheimer’s Society argued that such integrated services presented “an opportunity for people living with dementia to experience better joined-up care, but this will require sustained sector-wide funding to achieve”.
Similarly, Sally Warren, director of policy at the King’s Fund, said that proposals in the 2023 white paper suggested the earlier 2021 ambitions may have been scaled back:
In December 2021, the government originally announced £1.7bn of funding to support wider reform, with the 2021 white paper initially committing £1.1bn of those funds. This covered issues such as workforce training, innovation in housing, digitisation, unpaid carers. In early April, […] the ‘next steps’ for the white paper set out investment of £615mn (the Department of Health and Social Care says that £700mn is committed but this is not in the public documents), with £600mn still remaining unallocated. So, the investment that was first set out in detail has been scaled back and much of its purpose shifted towards meeting current cost pressures. The department says no funds have been cut, but the numbers committed are clearly lower. Only when you look at the detail do you spot several things:
- £100mn has indeed gone (due to complicated interactions with the Department for Work and Pensions’ attendance allowance budget),
- £300mn has already been spent. However, aside from a small amount spent on digitisation, no one knew at the time it was being spent on reform, so we can safely assume that most of this was spent on delayed discharges in 2022/23, not on improvement and reform
- £100mn of what was meant to be a £300mn investment to spark innovation in housing is now paying for home adaptations (meeting the current cost of the system) and the balance of £200mn is now lost. This means of the committed £615mn, not all of it is being spent on reform, it’s really just £515mn.
Overall then, of an initial £1.7bn for reform and improvements, the commitments now read just £515mn for reform, £100mn is lost, £300mn already spent to fund existing pressures through delayed discharges and £100mn to be spent on housing adaptations. £600mn is yet to be allocated—and is clearly at risk of going in the same direction and being spent to keep the current system going, not on improving it. A big reduction to pace and ambition for reform here as the government shifts money to keeping the current system going.
The government provided a recent statement on social care funding in response to questions raised by members of the House of Lords in a debate on the House of Lords Adult Social Care Committee’s report ‘A “gloriously ordinary life”: spotlight on adult social care’ on 16 October 2023. In a letter sent to members following the debate on 2 November 2023, Health Minister Lord Markham said:
As I said during the debate, the government has now made available up to £8.1bn over 2023/24 and 2024/25 to strengthen social care provision. In 2023/24, the government made available the following additional grant funding:
- £600mn through the discharge fund, shared equally between integrated care boards (ICBs) and local authorities. This grant funding for local authorities is paid out using the existing iBCF (improved Better Care Fund) grant shares and the funding is required to be pooled as part of the better care fund.
- £400mn of new funding for market sustainability and improvement. This is combined with an existing £162mn of fair cost of care and market sustainability funding introduced in 2022/23 to produce the £562mn market sustainability and improvement fund (MSIF). In July 2023, we supplemented this with a further £365mn through the MSIF workforce fund. Both grants are paid out using the adult social care relative needs formula.
- £1.265bn in additional funding for the social care grant, which is ringfenced for adults and children’s care. The majority of this funding is allocated using our ASC relative needs formula, while £80mn was used to equalise the variation in yield from the adult social care council tax precept.
As well as this grant funding, local authorities could raise additional funding through council tax, and those with social care responsibilities were able to set an adult social care precept of up to 2% per year without a referendum.
In total, this means that the government has made available up to £3.2bn for social care in 2023/24.
Lord Markham added that in 2024/25, the government will make available up to £4.9bn for social care. This will include additional grant funding for market sustainability and improvement, and for hospital discharges.
5. Read more
- Alzheimer’s Society, ‘Quality social care’, accessed 8 January 2024
- The Health Foundation, ‘Adult social care funding pressures’, 25 September 2023
- House of Lords Library, ‘Reforming adult social care: House of Lords committee report’, 28 September 2023
- House of Commons Library, ‘Adult social care funding (England)’, January 2023
Cover image designed by Freepik: www.freepik.com.
- NHS, ‘Symptoms of dementia’, accessed 8 January 2024. Return to text
- As above. Return to text
- NHS, ‘What is dementia’, accessed 8 January 2024. Return to text
- Alzheimer’s Research UK, ‘Prevalence and incidence of dementia’, accessed 8 January 2024. Return to text
- House of Commons Library, ‘Paying for adult social care in England’, 29 April 2022. Return to text
- Beacon, ‘FAQs’, accessed 10 January 2024. Return to text
- Alzheimer’s Society, ‘What is NHS continuing healthcare?’, accessed 10 January 2024. Return to text
- The Alzheimer’s Society, ‘How much does dementia care cost?’, 22 July 2020. Return to text
- As above. Return to text
- HM Government, ‘Build back better: Our plan for health and social care’, 7 September 2021. Return to text
- As above. Return to text
- HM Government, ‘Adult social care charging reform: Further details’, March 2022. Return to text
- As above. Return to text
- HM Treasury, ‘Autumn statement 2022’, November 2022, CP 751. Return to text
- House of Commons Library, ‘Adult social care funding’ (England), 17 January 2023. Return to text
- HM Treasury, ‘Autumn statement 2023’, 30 November 2023, CP 977. Return to text
- Department of Health and Social Care, ‘Adult social care system reform: Next steps to put people at the heart of care’, 4 April 2023. Return to text
- Department of Health and Social Care, ‘Key milestones timeline visual’, 4 April 2023. Return to text
- Local Government Association, ‘Provisional local government finance settlement 2023/24: On the day briefing’, 20 December 2022. Return to text
- Dementia Change Action Network, ‘Next steps to put people at the heart of care’, accessed 8 January 2024. Return to text
- The King’s Fund, ‘Do the department’s next steps for social care take us forwards or backwards?’ April 2023. Return to text
- Department for Health and Social Care, ‘Letter from Lord Markham to peers regarding questions raised during the debate on the Adult Social Care Committee report ‘A “gloriously ordinary life’’’, 2 November 2023. Return to text