1. Care Act 2014 Understanding The Costs

2. Understanding the Costs Update and Context of National Work Headlines/Early Indications of Key Messages National Perspective on the Surrey Tool and modeling generally Social Care Reform Regional Events – Links – Support Q&A Session

3. Overall Aim To have a common view – Each Council /Adass/LGA/DoH that best reflects what the real impact of social care and funding reform will be – locally as well as nationally. We need this information not only to plan nationally but also to plan locally

4. Context Original impact of funding and social care reform – ran into £ billions – see the next slide Preliminary results suggest impact will be much more than this – this on top of Huge reductions in spending – and Growing need – yet fewer people supported So crucial to have local and national assessments - of what the impact will be backed up by local and national evidence

5. Financial Impact – DoH Estimate

6. LA - Significant Cash Reductions in Funding Support per Head Across England 6

7. 7 Growing Need at a time when cuts in spending are leading to fewer people receiving support

8. Early Results We have results from about 20 Councils most of whom have used the Surrey Model. We have used these results to produce a first order of magnitude estimate of the national impact of funding reform. We have confidentially shared this with the DoH. They were sufficiently alarmed that we have started a regular dialogue and working group relooking at the costs as part of the DoH’s commitment to update the impact assessment of Social Care and Funding Reform.

9. Working Age Adult While the impact for working age adults is significant – with a cost range from £200m to £500m – it is not as significant as the Older Persons Threshold and Cap The biggest issue here is no one has yet decided how the arrangements for Working Age people will work. For the moment I would suggest putting this modelling on hold and concentrating on 65 and over.

10. Continuing Work We have encouraged those who have responded to Phase 1 – to share their results to provide an opportunity to compare these with others and use this comparison to review their own results. We have also asked an independent social care expert from the LSE to independently review the models in use – starting with the Surrey Model and now also the Lincolnshire model - and to independently review some of the results. Through this review and obtaining results from as many councils as possible – we would hope to have as comprehensive and robust an estimate of total costs as possible – recognising the billion pound significance of this work.

11. Confidentiality & Timescales There is a commitment to form a common view jointly across Adass/DoH/LGA on understanding the national and local costs. While work is being undertaken to review the models and results we want to maintain the confidentiality of these national results. We hope to have a first stage common view of the likely national impact by the end of July – just 7 weeks away.

12. 65 and Over - Modelling Whatever model you use it is crucial that it – distinguishes between men and women – draws on relevant income and capital – recognises that the care paths vary – with some self funders spending time being supported in the community before some move into residential care – generates results where the first years shows all of the impact of the threshold costs increase each year – and – significantly as the cap kicks in, The Surrey model while complicated can make these distinctions

13. Surrey Model Main Strengths Care Pathways Ability to include a number of different scenarios Ability to input own data Potential Weaknesses Allowing the model to generate numbers of self funders – as it seems to over estimate these – so use own data ELSA Income and Wealth – so use own income and wealth – see next slides Allowing for differences between men and women – see next slides – so run the model twice – once for men and once for women.

14. 65 and Over – Threshold Threshold – the full impact of this happens in Year 1 – Key variable is the depletion of capital as a self funder uses their capital to pay for their care needs – much as it was previously

15. Threshold - Income and Wealth A lot of people wrongly assume that if your capital is below £118,000 you will qualify for support – but only if you income was zero. Average income for most people is close to £10k a year – so your assets need to have reduced to below £70k before you will be eligible for support – below the line in the graph. 15

16. Threshold – Income and Wealth So a crucial part of estimating the impact of the threshold is estimating the income and the wealth – (housing and finance) of self funders. Income reduces with age – mainly because occupational pensions are lower the older you are. Net income does vary by region – but not that much – typically an average for single pensioners of £10,000 to £12,000 a year see the next three slides.

17. Income of Pensioners by Age 17

18. Growth in Occupational Pensions 18

19. Pensioners Income by Region 19

20. Threshold – Men and Women The majority of people in care are single people – Two thirds women and – One third men Men’s income is more than women’s mainly because of higher occupational pensions See the next two slides

21. Characteristics of Self Funders Male and Female 1/3 Male 2/3 Female 21

22. Income of Male & Female Pensioners 22

23. Wealth – Capital Wealth – earlier models tended to use ELSA data on wealth The ELSA source overstated wealth because – It included house contents and other non financial wealth – Housing wealth was self valued So our recommendation has been to use Land Registry data – which is based on what prices properties are actually selling for – see the next few slides and the additional slides.

24. 24 Funding Reform – Wealth Land Registry is the best source of housing market price data. The Wealth and Assets Survey and ELSA data is based on self valuation and as the table overleaf shows these sources over estimate the market price.

25. Funding Reform – Land Registry Data 25

26. Average House Price by LA 26

27. Income and Wealth Self Funders Using this data would indicate an average income and capital for self funders – in the table opposite Each band represents a third of all self funders

28. Modelling the Threshold and the Cap In creating a model for the older persons cap and threshold we can start with the threshold because this will bite first. Nearly all the impact of the threshold happens in the first year. Then move on to the cap for those not caught by the threshold. The Cap is much easier to model – as it is simply a matter of capturing costs for a variety of care paths – using current cost data – recognising that these costs vary from region to region – see the next slide. The Cap is significantly influenced by the daily living and accommodation cost. This is recognised as an issue by Adass/LGA/DoH – see the additional slides - but for the moment have been asked to just model on the current assumption. We can look at other assumptions later.

30. 65 and Over - Modelling Whatever model you use it is crucial that it – distinguishes between men and women – draws on relevant income and capital – recognises that the care paths vary – with some self funders spending time being supported in the community before some move into residential care – generates results where the first years shows all of the impact of the threshold costs increase each year – and – significantly as the cap kicks in, The Surrey model while complicated can make these distinctions

31. Calculating the Number of Self Funders Desk top exercise – residential care - – Identify all the care homes in a local authority from CQC Data – Identify the capacity of each home and the total capacity of the local authority area – Apply an occupancy factor – either from CQC regional data or local information to determine the number of occupied places – Deduct the number of people who are continuing health care in residential care – from local or CQC data – Then deduct the number of places supported by the Local Authority from PSSEX1 data – Should give a reasonable estimate of the number of self funders in residential care Survey of care providers - is also a good way of identifying the number of self funders in residential care and probably the only way of identifying the number of self funders in the community – a number of councils have done this – so Nottinghamshire, Birmingham, Richmond, Hounslow, Lincolnshire,

32. Local Modelling We would still suggest that where possible – even though it is cumbersome to use - that as many LA’s as possible attempt to make use of the Surrey Model. All the LA’s in the South West are making use of the Surrey Model – where three Councils who have made extensive use of the model have been supporting others across the region with more limited resources. This seemed to be the conclusion of the event in the East Midlands where a number of councils are also using the The Lincolnshire model – but would hope to also make use of the Surrey Model across the region – with both models subject to independent expert from the LSE Once we have results from a number of councils across England – we can then develop a very simple tool to take these National results to apply at a local level using local data.

33. Social Care Reform Funding reform is only part of the Care Act The most significant part of Social Care Reform is the increased support available for carers – with an impact on the number of assessments and reviews and the amount of support offered This is expected to grow over the next three to four years see the next slide If you have not done so already – as a safeguard include the costs of this in your Better Care Fund plans.

34. Care Reform DoH Impact Assessment 34

35. DoH Impact Assessment 35

36. Social Care Reform The other major component of the reform will be the number of self funders who will come forward to have their care needs assessed and reviewed and a care account started. In both cases the impact will be influenced by the behaviours of carers and self funders To have a better handle on this our recommendation is that a dialogue/survey is undertaken with carers and self funders Whilst people’s actual behaviour might differ to what they may say in a survey – it is still better to have this information than none.

37. Regional Events – Links Great to see the work going on here and in other regions to have regional sessions where those working on understanding the costs - can meet and share their experience of the modeling. Donna Ridland from Liverpool and Leon Bergman from Wigan are the North West Regional Links for this work. Have started preparing at least monthly updates to go out to everyone working on the modelling

38. Summary Overall Aim - common view nationally and locally of likely impact – We are talking about £bns - so crucial to have local evidence - ideally surveys of self funders and carers; Prioritise the work on 65 Plus - Learn from each other and independent expertise Timescales - first stage common view by the end of July – just 7 weeks away; Don’t forget the Social Care as well as the Funding Reforms -

39. Questions and Answers

40. Additional Slides Daily Living and Accommodation Costs

41. Daily Living/Accommodation Costs Useful source of national costs for older people and working age adults and occupancy information 41

42. Daily Living/Accommodation Costs This work suggests: - Average Accommodation costs of £150 a week and Prepared Meal Costs of £90 a week Hence the average figure of £240 a week – but 42

43. Daily Living/Accommodation Costs Meals are being prepared because people are not able to prepare meals for themselves Meal preparation is included in care support for Daily Living Activities and funded by the LA If we base the costs on food costs then – average spend for those over 75 is no more than £40 a week. 43

44. Daily Living/Accommodation Costs This would suggest average costs of £190 a week – close to the figure suggested in the Dilnot review. The major component of these costs £150 a week is accommodation costs and these vary significantly across the Country because of variations in land and building costs and values. 44

45. Daily Living/Accommodation Costs Hence the suggestion to base this on a percentage of total costs – 37.5% - with a ceiling of £240 a week. 45