Scrapping the social care cap is a disgrace that will come back to haunt this government

During the election, Labour committed to overhauling the ‘Cinderella service’ of adult social care – yet, in one of her first acts as chancellor, Rachel Reeves has removed the ceiling that limits an individual’s costs to £86,000. Will the public settle for another sticking-plaster solution, asks Andrew Grice

Ditching the Boris Johnson-era cap will save the Treasury around £1bn – but at the expense of ordinary people paying for their own social care bills, running into hundreds of thousands of pounds (PA)

Here we go again. The Labour government has become the latest to kick the crisis in social care into the long grass. So much, it seems, for Keir Starmer’s promises of “change” and to tackle the long-term challenges others had ducked.

Rachel Reeves, the chancellor, scrapped the £86,000 limit on lifetime care costs due to take effect in England in October 2025 as part of the £13bn of cuts to help fill what she called £22bn of unfunded commitments covered up by Rishi Sunak’s government. The cap would have placed an upper limit on the amount individuals would be required to put towards their support at home or in care homes. Ditching the cap will save the Treasury around £1bn – but at the expense of ordinary people paying for their own social care bills, running into hundreds of thousands of pounds.

“History is repeating itself,” one care provider told me with a familiar weary sigh. Andrew Dilnot, the economist who proposed the cap in 2011, told the BBC the decision is a “tragedy”, adding: “We’ve failed another generation of families.”

It was another example of social care “being given too little attention, being ignored, being tossed aside”. He pointed out the £1bn saved by Reeves was “one one-thousandth” of total public spending of £1 trillion.

Dilnot also proposed people with assets up to £100,000 qualify for council support, rather than the current £23,250. Although legislation was passed in 2014, the cap’s introduction was repeatedly delayed.

There was no guarantee the Tories would have implemented it if they had won the election. Whitehall insiders say the policy was in the “deep freeze”, and Reeves claimed it was unfunded. Local authorities complained no preparatory work was underway for a complex scheme which would, in effect, mean “running a meter” on people’s care costs. When the County Councils Network called for the cap to be delayed, it gave the new government cover to do so.

Labour has never been as keen on the cap as the Tories, whose starting point was to protect family assets and prevent people from selling their homes to fund their care. There was a clue when the Labour manifesto did not mention the cap. But Wes Streeting, the health secretary, implied in media interviews during the election that Labour would retain it. He said Labour had “no plans” to change the cap – a non-denial denial – but wanted to give the social care sector “certainty and stability”. Unfortunately, Reeves’s decision has created more uncertainty and less stability.

However, there is another side to this story. The Dilnot reforms were only one part of a complicated jigsaw. Labour can argue the top priority is to stop the social care system collapsing: some 1.5 million people have unmet needs. Councils desperately need more money as they tackle a huge backlog of requests for help – as ever, the Cinderella service is less visible and receives less media attention than NHS waiting lists, even though the care crisis adds to the pressures on hospitals.

Labour’s first move will be to bring in a “fair-pay agreement” – sensible in a sector plagued by 150,000 vacancies.

Officially, the Dilnot plan is not dead. But I suspect it is unlikely to be revived. “It was the essay question for the coalition in 2011, and Dilnot came up with an answer,” one Labour insider told me. “It is not the right question today.”

Labour might be more attracted by the system in Scotland, which offers free personal care even if the scheme is underfunded, or Wales, where the devolved government funds care in people’s own homes but not in care homes.

Labour’s manifesto promised a “national care service” but provided little detail. Andrew Harrop, general secretary of the Fabian Society and an architect of the plan, said Reeves was right to rule out a cap next year and should instead order a fundamental review of the cost pressures facing adult social care over the next decade, and all reform options.

He added: “The care system will require significant extra funding next year and into the future, but a measure designed to reduce costs for more affluent families should not have first call on new money under a Labour government. The top care spending priorities must be to improve pay and conditions for the workforce and to end the covert rationing of support which is excluding hundreds of thousands of people from help to which they are entitled and badly need.”

Streeting has suggested the “national care service” might take 10 years to achieve. He genuinely wants to forge a cross-party consensus and is expected to set up a commission, which might be chaired by Louise Casey, the plain-speaking, respected Whitehall troubleshooter.

Consensus is the right route: it would stop a repeat of the Tories branding Labour’s plans a “death tax” (at the 2010 election) and Labour attacking Theresa May’s “dementia tax” (2017).

Cross-party proposals might also emerge from the Commons’s health and social care committee, which will be chaired by a Liberal Democrat MP. Ed Davey, the Lib Dem leader, made the running on care at the election.

Labour must not put everything on hold until the commission reports. It needs a twin-track approach, safeguarding the system while seeking a long-term solution to finally end this perpetual crisis.

In opposition, Starmer promised an end to “sticking-plaster solutions”. His decisions on social care will tell us whether he meant it.