Botched care plans could add £26 to council tax bills across Shropshire

Gordon Brown to make local taxpayers pay the price for personal care changes.Local MP Philip Dunne warned of the Government 's latest unfunded proposals for new social care plans which would leave Shropshire Council with a massive bill to pay for new social care plans. Analysis has revealed that Gordon Brown's unfunded plans for free personal care at home could put £26 a year on the average council tax bill, on top of other local pressures. This is due to an estimated £580 million black hole left by the government.

• Senior councillors in Shropshire Council have warned that Gordon Brown's plans "are unclear, unfunded and are likely to have a significant impact on existing local services, including possible cuts and rises in council tax".
• Town hall experts at the Local Government Association have added that "this is clearly a new burden" on councils, while Social Services directors from across the country have asserted that Gordon Brown has "significantly underestimated the true costs involved."
• On top of the council tax hike, there is also the threat of an additional £20,000 "death tax" by Gordon Brown to pay for new National Care Service proposals.

Mr Dunne said:

"Everybody wants to give older people more support in their old age, especially the most vulnerable. Helping the elderly pay for the cost of this care when they need it is particularly important in Shropshire and in the Ludlow constituency where almost a quarter of our population is over over 65. That is why Conservatives will introduce a voluntary Home Protection Scheme to allow people - for a one off £8,000 payment - to make sure they never have to sell their home to pay for residential care.

"But Labour's plans to extend free personal care and to introduce a National Care Service are in chaos. Labour ministers in Whitehall are considering levying a compulsory death tax of up to £20,000 on every person in England, and now it looks like they'll put another £26 a year on Shropshire's council tax. Gordon Brown needs to come clean about who will pay the price for his plans."

BACKGROUND:

COUNCIL TAXPAYERS TO FOOT BILL FOR NEW CARE POLICIES

The Government is introducing a new law, the Personal Care at Home Bill, which will require personal care to be provided free to persons with the highest needs in their homes. However, rather than being properly funded by central government, councils will be forced to find £250 million towards it.

The Local Government Association have slammed the Government for imposing £250 million of costs onto local councils, criticising Labour Ministers' vague claims that it could be funded by 'efficiency savings'.

"Councils are expected to part-fund the commitment to the tune of £250 million a year from non-specific 'efficiency savings'. The Government argues this is not a new burden. We completely reject this assessment. This is clearly a new burden and, as such, should be met fully from central government funding, or via the lifting of other existing burdens on councils. Councils have demonstrated they are most efficient part of the public sector and are already taking difficult decisions to meet a 3 per cent efficiency requirement for 2009-10, rising to 4 per cent for 2010-11. Councils do not have further efficiency savings sitting waiting to be used on new initiatives" (LGA briefing, Personal Care at Home Bill, 1 February 2010).

http://www.lga.gov.uk/lga/core/page.do?pageId=7821340

The Association of Directors of Adult Social Services has warned that the total cost of the policy is actually likely to be at least £1 billion, leaving a £580 million bill for local authorities:

"Overall costs have been estimated at £670 million, made up of £420 million central funding and £250 million in local government efficiency savings... Government estimates of the funding required to provide free personal care for elderly people with high levels of need have 'significantly underestimated the true costs involved' according to the results of a survey carried out by ADASS. The warning comes shortly before the House of Lords is due to debate the Personal Care at Home Bill, which faces adult social services departments with the challenge of delivering an additional £250 million in efficiency savings. According to the ADASS survey the true cost of the policy could be a minimum of £1 billion, with the overall cost to local authorities rising to more than twice the £250 million originally calculated by Central Government" (Association of Directors of Adult Social Services press release, 30 January 2010).

http://www.adass.org.uk/index.php?option=com_content&view=article&id=542:survey-findings-cast-doubt-on-government-care-cost-estimates&catid=127:press-releases-2010&Itemid=419

Slammed across political spectrum

A cross-party selection of senior councillors have warned that "The proposals contained in the Government's Personal Care at Home Bill are unclear, unfunded and are likely to have a significant impact on existing local services, including possible cuts and rises in council tax... We fully support the principle of providing additional support to those with the most critical care needs. What we cannot support, however, is a piece of legislation that has major weaknesses and risks adding further strain to an existing system already under considerable financial pressure... We also have major doubts over how the Government intends to fund this scheme. It has failed to elaborate on where its own contribution will come from while appearing to be reliant on savings that may either be non-existent or have already been allocated elsewhere from councils. This does not address subsequent years where even greater restrictions in public spending will apply" (The Times, 10 February 2010).

http://www.timesonline.co.uk/tol/comment/letters/article7020814.ece

The letter was signed by the following councils:

After pressure from the Labour Party in London, Labour councillors in Halton, South Tyneside, Durham, Lambeth and Sunderland signed the letter and then subsequently withdrew their support (The Times, 11 February 2010).

http://www.timesonline.co.uk/tol/news/politics/article7022654.ece

'Cruel deception' says former Labour Health Minister

Former Labour Health Minister, Lord Warner, has said: "Promising elderly and vulnerable people and their families something which is not affordable or deliverable any time soon is a rather cruel deception and I certainly don't want to have any part of it" (The Times, 2 February 2010).

http://www.timesonline.co.uk/tol/news/politics/article7012137.ece

Cost of the policy on council tax

There are 21.8 million households in England liable to council tax (DCLG, Local Government Financial Statistics England 2009, Table 2.2m). That means Labour's unfunded personal care plans threaten to leave households with a £26 a year increase in council tax per household.

THREAT OF LABOUR "DEATH TAX" ON TOP

The Government has broader plans for a 'National Care Service', of which the free personal home care policy is the 'first step'. Labour Minister, Andy Burnham, has admitted that Government 'is considering' a £20,000 death tax; reports suggest it is Labour's favoured option.

The Government's social care Green Paper last year set out funding options for Gordon Brown's plans for a National Care Service. The 'comprehensive' option in the Government's Green Paper said: "In this system, everyone over retirement age who had the resources to do so would be required to pay into a state insurance scheme... As an indication of the costs, people might need to pay around £17,000 to £20,000" (Department of Health, Shaping the Future of Care Together, 14 July 2009, p.18).

http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_102338

Andy Burnham confirmed that the Government is "still considering" all the options in the Green Paper, including the death tax. He said: "We are still considering those three models, there is no decision in Government about which of those models we should take forward in a white paper" (Press Association, 9 February 2010).

CONSERVATIVE STANCE

Conservatives will make sure that people will no longer be forced to sell their homes to pay for their long-term care. In England, all the costs of residential care must be met by the individual if they own just £23,000 or more in assets - including the value of their homes. Most pensioners have only modest savings, so practically anyone who has worked hard all their lives to pay for a home of their own is at risk if they need to enter care. There are very few insurance products currently on the market that cover people for entering care homes, and these are typically far too expensive for most people.

A Conservative Government will:

• Introduce a new, voluntary scheme with a one-off joining fee that we estimate will be around £8,000, paid at the age of 65, in return for a guarantee that all fees for permanent residential care would be waived - for life.
• This is excellent value: the average amount in fees someone has to pay for entering residential care is over £50,000, but can be far more if they need to stay for several years.
• Existing insurers could help run the scheme, using branded products, with the Government setting out some basic rules and safeguards to ensure the scheme remains both fair and financially viable over the long term. No public money will be needed.
• As well as allowing people to join the scheme as they reach 65, we will open the scheme to existing over-65s for a fixed 'window' of time so everyone has the opportunity to benefit.

We are also looking at innovative ways to help people stay in their own homes for longer, such as Telecare, reablement, better home adaptations and community support programmes.

We support the idea of a national care service, but it must be consistent with the following principles and must not involve abolishing disability benefits.

• A Personalised not Nationalised Service. State provision can often be inflexible whereas personal budgets and direct payments enable people to purchase the care that best meets their needs. As far as possible, we want care to be delivered in this way, because it empowers people and gives them real choice. It is also a more efficient way to deliver services. Often he amount actually paid to their carers looking after them only represents about half of the cost of the total care service.
• Better Support for Care at Home. We need to help people to stay in their own homes for as long as they can. We have promised to spend a greater share of the NHS budget on public health. Local Directors of Public Health will be able to spend some of this money on improving support for people in their homes. We are looking at innovative ways to do this, such as telecare, better home adaptations and community support programmes.
• Consistent National Standards for Assessments of Care Needs. At the moment there is huge variation in the care packages available in different local authority areas. We will make sure there is a single assessment for care, which is consistent across the country, based on national standards, and which is consistent, should you move to a different area.
• Protection - people no longer forced to sell their homes to pay for care. As described above, we will make sure that people will no longer be forced to sell their homes to pay for their long-term care.