Andrew Dismore

Pensioners in London face paying more than £110,000 for their residential care before they hit the so-called ‘cap’ on care costs, new analysis published by Labour shows today.

The average figure to be funded by pensioners is 50% more than the £72,000 which ministers have claimed.

Labour’s analysis also reveals that three out of four elderly people in the region will have died before they reach the ‘cap’

The Government’s proposals were branded a ‘con’ by Andrew Dismore, Labour London Assembly member for Barnet and Camden and Labour prospective parliamentary candidate for Hendon.

The ‘cap’ will be based on the standard rate local authorities pay for a bed in a care home in their area, not the actual amount self-funders are charged – which is much higher than the council rate.

In 2016/17 – when the ‘cap’ is due to start – the average council rate for residential care in London is estimated to be £664 a week, but the average price of a care home bed will average at around £686 a week, and hundreds of pounds more in many areas. The difference between the council rate and what pensioners actually pay won’t count towards the ‘cap’.

Pensioners in care homes will also have to pay £230 a week for their ‘hotel and accommodation’ costs, which are counted separately from care costs, and which won’t count towards the ‘cap’.

When both these factors are taken into account, it will take more than 3 years for elderly people in London to hit the so-called ‘cap’ – during which time they will have clocked up around £114,000 for their actual residential care home bill.

 Andrew Dismore  said:

“The Tory-led Government is trying it on again. They claim that their cost of care will be capped at £72,000, but the shocking truth is that pensioners in London face paying much more before the so-called ‘cap’ kicks in.

The vast majority of care home residents in our region won’t benefit even after spending all that money – three out of four will have passed away before they are eligible for any help at all under the Government’s new system.

Older people and their families in London  deserve better than to be conned in such underhanded way.”

 

Liz Kendall MP, Labour’s Shadow Minister for Care and Older People, said:

“David Cameron has repeatedly claimed that no-one will have to pay more than £72,000 to pay for their care, but this simply isn’t the case.

“The Government should be straight with elderly people about what they will really have to pay for their care. Families need to be told the facts, so they can properly plan for the future, and not have the Prime Minister attempt to pull the wool over their eyes.”

 

1. According to Chartered Institute of Public Finance and Accountancy (CIPFA), Social Care Actuals in 2011/12 the average rate a local authority paid for a bed in a residential care home in England was £477, though rates vary widely across the country (see chart below).

 

The House of Commons Library analysed local authority rates from the previous 5 years and estimated that they have been increasing at the rate of 1.8% each year. At this pace, the average local authority rate in 2016/17 (when the cap comes into force) will be £522.

 

REGION	LOCAL AUTHORITY RATE IN 2011/12 (£ per week)	ESTIMATED LOCAL AUTHORITY RATE IN 2016/17 (£ per week)
North East	463	506
North West	444	485
Yorkshire and Humber	430	470
East Midlands	408	446
West Midlands	461	504
East of England	487	532
London	607	664
South East	502	549
South West	517	565
England	477	522

 

 

1. According to Laing & Buisson Elderly Care Market Report in 2012/13 an average residential care bed in England cost £532. The House of Commons Library analysed Laing and Buisson reports from the previous 5 years and estimated that prices have been increasing at the rate of 3.5% each year. At this pace, the average price of bed in 2016/17 will be £610.

REGION	REAL PRICE OF BED IN 2012/13 (£ per week)	ESTIMATED REAL PRICE OF BED IN 2016/17 (£ per week)
North East	471	540
North West	468	537
Yorkshire and Humber	463	531
East Midlands	506	581
West Midlands	495	568
East of England	564	647
London	598	686
South East	594	682
South West	551	632
England	532	610

 

Please note this is an underestimate, as Laing & Buisson reports looks at average prices across both council-funded and self-funded beds. Prices self- funders actually pay will in reality be even higher the ones quoted here and used for calculations, but such figures are not collected separately.

 

3.    Elderly people in residential care will have to make a ‘cost of living contribution’ of £230 a week (£12,000 a year) regardless of where they live, to cover their accommodation, food and heating, which also won’t count towards the cap.

 

4.     In London, with a standard council rate of £664 a week, and subtracting £230 a week for ‘general living’ costs, only £434 a week will count towards the ‘cap’ on care costs. It would take an elderly person 3 years and 2 months to reach the ‘£72,000 cap’ on this basis. During this time they would have spent almost £114,000 on their residential care, based on an average actual price of £686 a week. In reality, many care homes already charge far more than this.

 

5.    The Government is increasing the upper means test threshold (under which pensioners may be eligible for some council support to help pay for their care) from £23,250 now to £118,000 in 2016. However, due to the way the means test works, pensioners on average incomes won’t qualify for any council support and will still have to meet all of their care costs from their own pockets unless they spend down their income, savings and assets (property) to the lower means test threshold, which will be around £17,000 in 2016.

 

6.    Only around 27% of English care home residents live in residential care for 3 years. (Length of Stay in Care Homes, J Forder and J L Fernandez Personal Social Services Research Unit, LSE).

 

This means that in London, where it will take more than 3 years to hit the ‘cap’, 3 out of 4 pensioners will have died before they reach the cap.