Thread by @blimeysimon

This is an important analysis on the implications of @DHSCgovuk 'fair cost of care' reform, which has received less attention than the 'cap' but involves an unprecedented, potentially risky intervention by govt in the #socialcare market. Quick thread:
countycouncilsnetwork.org.uk/new-analysis-w…

'Fair cost of care' basically involved the government funding local authorities to pay more for the care home places/homecare they commission. Why is government bothered about that? Two, related reasons...

1. Most councils, because they're short of cash, 'underpay' for publicly-funded care home places/homecare. To compensate, providers 'overcharge' people who self-fund their own care. This 'self-funder subsidy' is obviously unfair. However, it's not why govt is acting now...

2. No, it's due to the planned 'cap' on care costs. With this, people's care costs will add up until they reach £86k, when govt starts paying. But it won't be their ACTUAL costs, it'll be the lower cost the council would have paid. People may well feel they've been short-changed.

So, the government has a plan: let people ask the council to arrange their care, at the council rate, but fund councils to pay a 'FAIR rate' for that care, somewhere between what they pay now and the rate paid by self-funders. Problem solved.

Except how much extra money will councils need to fund that 'fair rate'? @DHSCgovuk said in December it would be £378m for care homes and £178m for home care in 2023/24. Almost immediately, councils and providers said the numbers were too low.
gov.uk/government/pub…

Today's report, from industry experts @LaingBuisson and @CCNOffice, puts some hard analysis behind that concern. It says the real figure is between £782m and £1.69bn. It warns of 'widespread market instability' if the reform goes ahead at the original level of funding.

(As an aside, some of the report's language is quite entertaining: it concedes that @DHSCgovuk has made a 'valiant' attempt to quantify the cost but says it is 'based on a somewhat limited understanding of how care homes currently work commercially'.)

So what can @DHSCgovuk do? Trust its numbers and hope care homes don't go bust? Risky. Get @hmtreasury to stump up more money? Tricky. Or limit the measures, perhaps by restricting the number of self-funders who can get a 'fair cost of care'? People may still feel short-changed.

Overall it's surely good @DHSCgovuk wants to end the 'self-funder subsidy'. But when the cap was due to be introduced in 2016, the govt stopped short of introducing this measure, precisely due to concern about market instability. That suggests a need to proceed with real caution.