Consultation outcome

Distribution of funding to support the reform of the adult social care charging system in 2023 to 2024

Updated 6 April 2023

This was published under the 2019 to 2022 Johnson Conservative government

Applies to England

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This publication is available at https://www.gov.uk/government/consultations/adult-social-care-charging-reform-distribution-of-funding-2023-to-2024/distribution-of-funding-to-support-the-reform-of-the-adult-social-care-charging-system-in-2023-to-2024

Following an announcement by the Chancellor of the Exchequer on 29 July 2024, the planned adult social care charging reforms, which were inherited from the previous government, will not be taken forward in October 2025.

Executive summary

About this consultation

On 7 September 2021 the Prime Minister announced £5.4 billion of investment in the adult social care system in England, to be delivered over 3 years to transform the sector by introducing a new adult social care charging framework from October 2023. At the heart of the reformed system is an £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. In addition, the reforms increase the point at which a person is eligible for local authority means-tested support. From October 2023:

  • the upper capital limit will rise to £100,000 from the current level of £23,250
  • the lower capital limit will increase to £20,000 from £14,250

The result is what the government believes is a credible, deliverable and sustainable new charging system.

The government has committed to consulting on its proposals for funding distribution. This consultation seeks views on proposals for distributing funding to support the first year of delivery of adult social care charging reform in 2023 to 2024. There are proposals for distributing funding for needs and financial assessments, the extension to the means test, and the cap on care costs.

If you have further questions on the content of this consultation please contact [email protected]. Please do not use this email address to respond to the consultation.

Our proposals

In developing our distribution proposals, we have tried to balance the principles of funding certainty, transparency, robustness and fairness and sought regular feedback from the sector. We have sought independent expertise from the Adult Social Care Research Unit (ASCRU) at the Personal Social Services Research Unit (PSSRU) at the University of Kent, who we commissioned to update relative needs formulae previously developed during the implementation of the Care Act 2014. These formulae use a bespoke, independently formulated, and robust model to estimate the additional relative needs to local authorities specifically resulting from charging reform.

Besides the ASCRU-PSSRU formulae we also present options to use new Office for National Statistics’ (ONS) estimates of the self-funding population to distribute funding for additional assessments in 2023 to 2024, as well as to distribute funding for the costs associated with extending the means test for adults aged under 65 based on either:

  1. relative levels of 16 to 64 Personal Independence Payment (PIP) claimants and relative levels of housing wealth, designed by ASCRU-PSSRU
  2. a simple per capita basis for people aged 18 to 64

Detailed technical information about the distribution formulae described in this consultation can be found in the technical guide on the adult social care charging reform relative needs formulae 2023 to 2024, published in conjunction with this consultation.

Distributing funding for the extension to the means test

The new adult social care charging framework will extend the means test so that more people become eligible for local authority support with their care costs. We estimate the cost of these changes at £490 million in 2023 to 2024.[footnote 1]

We consider that the ASCRU-PSSRU means test extension formula for people aged 65 and over (2022) represents a robust and fair approach for predicting relative demand for people aged over 65 ahead of reform go-live. We therefore propose to use this formula to distribute all costs associated with extending the means test for people aged over 65.

There is more uncertainty about the distribution of costs associated with extending the means test for adults aged under 65. We put forward 3 options for distributing this funding based on:

  1. relative levels of 16 to 64 year old PIP claimants and relative levels of housing wealth, designed by ASCRU-PSSRU
  2. a simple per capita basis (for people aged 18 to 64)
  3. using the ASCRU-PSSRU means test extension formula for people aged 65 and over (2022)

Distributing funding for the cap on care costs

Once people reach the new £86,000 cap, local authorities will pay for all eligible care costs. While the introduction of the cap will be an important change in the way care is paid for, only a small number of people with particularly acute and therefore costly care needs are expected to reach the cap in 2023 to 2024, with an estimated cost of £35 million.[footnote 2] Due to these relatively small costs and lack of robust data, we are not currently introducing a new formula for the costs to local authorities of paying for care once a person reaches the cap in 2023 to 2024.

In the absence of credible data, and because we expect the few people reaching the cap in 2023 to 2024 to be aged under 65, we propose to distribute funding for the cap on the same basis as means test funding for adults aged under 65.

Distributing funding for implementation and additional assessments

Local authorities are required to conduct needs and financial assessments for all individuals who may have a care and support need. The introduction of reforms will generate additional assessments and result in a higher long-term baseline of assessments. The estimated costs of conducting additional assessments generated through the introduction of reforms are £247 million in 2023 to 2024.[footnote 3]

Local authorities have also told us that the number of people who self-fund their care in an area will be a significant driver of the number of assessments they will need to conduct. We are therefore proposing 3 options for distributing funding for additional assessments:

  • ASCRU-PSSRU assessments formula (utilisation approach) 2022
  • ASCRU-PSSRU assessments formula (normative approach) 2022
  • the estimated self-funding population level in care homes by the ONS with area cost adjustment

Further detail about the functionality of these formulae can be found in chapter 5 of this consultation.

Next steps

This consultation will be open until 23 September 2022. We will then study the responses to this consultation and confirm our approach by, at the latest, the 2023 to 2024 provisional local government finance settlement. As per previous commitments, the government will keep charging reform distribution under review in future years.

Future work will include the development of a bespoke approach for distributing local authorities’ costs for people reaching the cap.

1. Introduction to this consultation

Adult social care charging reform

On 7 September 2021 the government published Build Back Better: Our Plan for Health and Social Care, announcing £5.4 billion of investment in the adult social care system in England to be delivered over 3 years to transform the sector and reform the charging system that underpins it.

From October 2023, the government’s new charging framework will:

  • introduce a new £86,000 cap on personal care costs
  • extend the means test system by raising the lower capital limit to £20,000 and the upper capital limit to £100,000

The reform package includes £3.6 billion to reform the adult social care charging system and enable local authorities to move towards paying providers a fair cost of care.

On 5 January 2022, the Department of Health and Social Care (DHSC) published the adult social care charging reform consultation impact assessment.

On 15 June 2022, we published the operational guidance to implement a lifetime cap on care costs.

Topic of this consultation

This consultation seeks views on proposals for distributing funding for the delivery of adult social care charging reform in 2023 to 2024. The consultation includes options for the distribution of funding for:

  • the extension to the means test
  • the cap on care costs
  • implementation and additional assessments

The scope of this consultation does not include the distribution of the £1.36 billion Market Sustainability and Fair Cost of Care Fund, about which guidance was published on 24 March 2022. Further details about the allocation of the fund in 2023 to 2024 will be made available later this year.

This document is structured as follows:

  • Chapter 1 describes the charging reform policy and sets out the scope of this consultation

  • Chapter 2 explains how we have developed our proposals for distributing the associated funding in 2023 to 2024

  • Chapter 3 sets out our proposals for distributing means test funding

  • Chapter 4 explains our proposals for distributing funding for the cap on care costs

  • Chapter 5 sets out our proposals for distributing implementation and additional assessments funding

  • Chapter 6 details the next steps DHSC will take to finalise allocations for 2023 to 2024 and to develop proposals for future years

  • Annex A shows tables exemplifying options for allocating means test and cap funding

  • Annex B shows tables exemplifying options for allocating implementation and additional assessments funding

In conjunction with this consultation, DHSC has also published the technical guide on the adult social care charging reform relative needs formulae 2023 to 2024. The technical guide includes:

  • detailed technical information about the ASCRU-PSSRU formulae
  • the formulae that made use of the ONS estimates of the care home self-funding population
  • information relating to adults aged under 65 for distributing charging reform funding in 2023 to 2024

The consultation will close on 23 September 2022 and the proposed allocations to local authorities will be confirmed, at the latest, by the 2023 to 2024 provisional local government finance settlement.

Funding profiles

Tables 1 and 2 show our estimates of the funding required in 2023 to 2024 to support local authorities to prepare for and implement the new charging system. This excludes any additional costs in 2023 to 2024 due to the trailblazer initiative (see notes in the ‘Principles of distribution’ section below).

These estimates are indicative, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed.

Table 1: estimated cash prices for implementing charging reform in 2023 to 2024

Rounded to nearest £1 million, some totals may not add up due to rounding.

Funding stream Estimated cash prices for people aged 65 or over in 2023 to 2024 (£ million) Estimated cash prices for adults aged under 65 in 2023 to 2024 (£ million) Total (£ million)
Extension to the means test 355 135 490
Cap on care costs 0 35 35
Implementation and additional assessments 223 24 247
Total 578 193 771

Geographical scope

These proposals relate to England only as adult social care is devolved in Scotland, Wales and Northern Ireland.

Distribution of the Market Sustainability and Fair Cost of Care Fund

The distribution of the Market Sustainability and Fair Cost of Care Fund is out of scope in this consultation. However, the government recognises the importance of that fund to local government.

In the 2022 to 2023 local government finance settlement, £162 million of the fund was allocated using the adult social care relative needs formula, as is the government’s standard approach for allocating adult social care resources. Local government allocations for 2022 to 2023 were published on 7 February 2022 and, on 24 March 2022, DHSC published further detail about the fund in Market sustainability and fare cost of care fund 2022 to 2023: guidance.

A further £600 million per year will be made available in both 2023 to 2024, and 2024 to 2025. The government will review its approach to distributing this fund ahead of finalising allocations for 2023 to 2024, to ensure it best meets the fund objectives. To achieve this, we will work closely with local authorities to monitor market changes and review information received from local authority cost of care exercises and provisional market sustainability plans, which are due to be submitted to DHSC by October 2022.

The government wishes to provide local authorities with as much certainty as possible over their funding allocations ahead of the financial year but recognises that more information about the distribution of costs will become clearer over time, including through the required local authority cost of care exercises.

Impact assessment

The adult social care consultation charging reform impact assessment was published on 5 January 2022.

The adult social care charging reform: public sector equalities duty impact assessment was published on 17 November 2021.

Trailblazers

As the government announced on 25 March 2022, a small number of local authority trailblazers will introduce charging reforms in January 2023, ahead of a national rollout in October 2023. The trailblazers will shape the government’s approach to implementation by allowing DHSC to test key aspects of reform.

As a consequence of introducing charging reform earlier than other local authorities, the costs described in this consultation will arise earlier in trailblazers:

  1. For the delivery of assessments, trailblazer authorities will require funding in 2022 to 2023 to commence this work. Initial funding of £2,127,351 was distributed in June, and this will be ‘topped up’ later in 2022 in line with the adopted national approach for distributing implementation and assessments funding.
  2. Trailblazer authorities will go live with the extended means test in January 2023, effectively 3 financial quarters ahead of other local authorities. Accordingly, they will require additional funding to cover the period from January to September 2023, distributed in line with the national approach adopted for distributing means test funding.

For ease of comparison, we have not shown this additional funding requirement in our exemplification of the funding approaches in this consultation document. Therefore, the figures shown exemplify the funding that would be provided if all ‘go live’ were taking place in all local authorities at the same time. DHSC will engage separately with trailblazer authorities to determine what this means for their funding allocations.

2022 to 2023 implementation funding

On 15 June 2022 the government announced a £15.4 million support grant to ensure local authorities have the necessary workforce capacity and technology system in place to successfully deliver charging reform. Further support will be made available to local authorities to enhance capacity and explore digital productivity tools, details of which will be confirmed in due course.

2. Our proposals

Developing our proposals

Local government is crucial to successful delivery of our plans for reform of the adult social care charging framework. We have committed to working closely with local government to develop robust proposals on the detail of charging reform, the underpinning operational guidance and our plans to distribute the required funding.

We have sought regular feedback from a working group of local authority, Local Government Association (LGA) and Directors of Adult Social Services (ADASS) representatives in the development of our distribution proposals. This consultation represents a further step in seeking a wider sector view.

We also drew extensively on the external expertise of researchers in the Adult Social Care Research Unit (ASCRU) at the Personal Social Services Research Unit (PSSRU) at the University of Kent who, in 2014, were involved in developing the distribution formulae for the implementation of the Care Act 2014. In 2021, DHSC asked the ASCRU programme at PSSRU to update these formulae in preparation for the introduction of the new charging framework in October 2023.

Principles of distribution

In developing our distribution proposals, we have tried to balance the following aims and principles:

  • funding certainty – the government wishes to provide local authorities with as much certainty as possible over funding allocations ahead of the 2023 to 2024 financial year
  • transparency – we have sought to set out how the distribution options are derived and highlight areas of uncertainty
  • robustness – we are putting forward options based on robust data, appropriate to the policy aims and have used external expert input to inform our approach
  • fairness – we are seeking to ensure distributions are based on underlying relative needs (within recognised data limitations). We have considered the appropriateness of existing datasets and whether data gaps would unduly influence funding distribution

We recognise that more data is becoming available about the impact of the reforms and that our understanding of distribution will continue to develop in the period pre and post October 2023. We will continue to monitor new data sources and consider whether modifications are required to distribution mechanisms in future.

Development of the distribution formulae

To prepare for the implementation of the new charging policy framework in October 2023, DHSC asked the ASCRU programme at PSSRU to update formulae for assessment costs and the extension to the means test previously developed during the implementation of the Care Act 2014.

These updates were completed in June 2022 and ASCRU-PSSRU published their report, Relative need formula allocation of additional funding to local authorities to meet social care charging reforms, on 8 August 2022.

ASCRU-PSSRU’s updated model for the assessment and extension to the means test formulae have been specifically designed to predict the relative size of the new public expenditure required for the extension to the means test, and consequent implementation and assessment costs. It builds on previous small area modelling used to estimate the additional relative needs to local authorities specifically resulting from charging reform. The modelling used the latest pre-COVID-19 utilisation information and individual level data from the English Longitudinal Study of Ageing.

Full details of the formula are available in the technical annex.

3. Distributing funding for the extension of the means test

Background

Under the current adult social care system, through a needs and financial assessment local authorities determine:

  1. whether a person has a care and support need
  2. whether those needs are deemed eligible to be met by the local authority
  3. whether they are eligible for financial support

Financial eligibility is measured against the means test.

From October 2023, the new adult social care charging framework will introduce changes to the means test:

  • the upper capital limit will increase to £100,000, from its current level at £23,250
  • the lower capital limit will increase to £20,000, from its current level at £14,250

Like the current system, the means test will be based on total assets, including both the value of a person’s home and their savings. If a person needs to continue to live in their own home, it will be excluded from the assessment of total chargeable assets. This is known as the housing disregard and is unchanged from the current system.

By raising the lower and upper capital limits, the new adult social care charging framework will extend the means test so that more people become eligible for local authority support with their care costs.

We have estimated the costs of these changes at £490 million in 2023 to 2024. This included £355 million for costs associated with extending the means test for people aged 65 or over, and £135 million for costs associated with extending the means test for adults aged under 65.

These estimates are indicative, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed.

Distributing funding for costs associated with the means test for people aged 65 or over

The ASCRU-PSSRU means test extension formula for people aged 65 and over (2022) has been specifically designed to predict the relative size of the new public expenditure required for the extension to the means test. It uses relevant proxy indicators for need, income and wealth, and informal care. The formula modelling includes intermediate steps that estimate the relative additional number of people with care needs expected to become eligible for local authority support with their care costs due to the means test changes.

As well as residential care, the formula also includes a community setting element, which was not the case when the formula was originally developed in 2013 to 2014. This means we can better capture the relative needs of local authorities due to the capital limit changes.

Metrics in the ASCRU-PSSRU means test extension formula for people aged 65 and over 2022

The formula uses the following metrics. The corresponding rates for each local authority are inserted into the formula to give a ‘relative need’ adjustment for local authority funding allocations:

  • Attendance Allowance claimants aged 65 and over per person aged 65 and over
  • people with limiting (significantly) conditions aged 85 and over per person aged 65 and over
  • home-owner households aged 65 and over per households aged 65 and over, multiplied by properties in Council Tax bands A, B, C, D and E per all properties
  • home-owner households aged 65 and over per households aged 65 and over multiplied by properties in Council Tax bands F, G and H per all properties
  • Pension Credit claimants aged 65 and over per capita aged 65 and over
  • couple households per households aged 65 and over

No area cost adjustment is applied to the means test formula as regional unit costs are included in the estimation of the formula.

Full details of the formula are available in section 2 of the technical annex.

Do you agree or disagree with the proposal to use the ASCRU-PSSRU means test extension formula for people aged 65 and over (2022) for distributing means test funding for people aged 65 and over in 2023 to 2024?

  • strongly agree
  • agree
  • neither agree nor disagree
  • disagree
  • strongly disagree

Please explain your preference.

Distributing funding for costs associated with the means test for adults aged under 65

As noted in the consultation stage charging reform impact assessment, there is limited high-quality data on adults aged under 65 with care needs.

There is also limited high-quality data over how these costs are distributed locally. There are few existing datasets which can help us predict the distribution of additional adults aged under 65 meeting the needs and financial eligibility requirements in the extended means test.

We have considered whether the ONS estimates of the self-funding population in care homes, published in May 2022, represented a reasonable proxy for possible future demand. These new estimates are a welcome addition to our understanding of the distribution of people funding their own care. However, for self-funder population estimates in care homes for younger adults, only 6 local authority level estimates are available. This is insufficient to provide a basis for funding distribution. Moreover, we were concerned that a distribution based only on residential care might not be a fair reflection of need since we expect a significant portion of current self-funding individuals aged under 65 to be receiving support in the community.

For costs associated with extending the means test for adults aged under 65, we propose 3 distribution options which we consider to meet the principles of distribution set out in the ‘Principles of distribution’ section above. Given the uncertainty, we have favoured simplicity in the options selected and intend to conduct further work in the period pre and post October 2023 to understand the distribution of pressures better and make improvements to the funding distribution mechanism.

Option 1: ASCRU-PSSRU means test extension formula for people aged 18 to 64 (2022)

ASCRU-PSSRU have developed a simplified formula for the extension to the means relative needs formula for adults aged 18 to 64. It takes the distribution of entitled cases for PIP[footnote 4] among the population aged 16 to 64 as a proxy measure for the distribution of care needs in the population. The distribution of home ownership rates among households aged 25 to 64, as per census data, are included as a proxy to variation in local wealth levels. No area cost adjustment is applied to the means test formula as regional unit costs are already included.

The formula assumes that the relative importance of both the need and wealth effects are the same for younger adults as they are for older adults, an assumption which is untested. Nevertheless, we consider this to be a rational approach to modelling the spread of likely additional demand.

Full details of the formula are available in section 2 of the technical annex.

Option 2: distribute based on a simple per capita basis for people aged 18 to 64

Under this option we do not attempt to control for variation in need or financial eligibility and assume that additional demand is even across the population of people aged 18 to 64.

Full details of this option are available in section 2 of the technical annex.

Option 3: distribute funding for adults aged under 65 using the ASCRU-PSSRU means test extension formula for people aged 65 and over (2022)

Using the older adults’ formula would assume that the cost pressures for younger adults are correlated with those for people aged 65 and over, which we cannot be certain of. However, given the data limitations for predicting new demand among people aged 18 to 64 noted earlier, we would propose an option whereby all funding is distributed using the formula for people aged 65 and over.

Full details of the formula are available in section 2 of the technical annex.

Do you have a preferred approach for distributing means test funding for adults aged under 65 in 2023 to 2024?

  • option 1 – ASCRU-PSSRU means test extension formula for people aged 18 to 64
  • option 2 – per capita (people aged 18 to 64) distribution formula
  • option 3 – ASCRU-PSSRU means test extension formula for people aged 65 and over (2022)
  • other

Please explain your preference. We are particularly interested in any evidence that would add to our understanding of the distribution of pressures.

4. Distributing funding for the cap on care costs

Background

The new charging framework will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime from October 2023. Once the £86,000 cap is reached, local authorities will pay for all eligible care costs. People may choose to ‘top up’ their care costs by paying the difference towards a more expensive service, but this will not count towards the cap. The cap will be implemented using legislation already in place under the 2014 Care Act.

While the introduction of the cap in October 2023 will be an important change in the way care is paid for, only a small number of people, predominantly aged under 65, with particularly acute care needs are expected to reach the cap in 2023 to 2024, with an estimated cost of £35 million.

These estimates are provided for indicative purposes only, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed.

Approach to distributing funding

We will distribute the estimated costs in 2023 to 2024. However, due to the relatively small costs and lack of robust data, we are not currently introducing a new formula for the costs to local authorities of paying for care once a person reaches the cap in 2023 to 2024. The distribution of these costs is a very important issue, which the government wants to get right and will be the subject of future consultation.

Since 2023 to 2024 costs are expected to be concentrated among adults aged under 65, and since the drivers of costs are similar to those for the extension to the means test, we propose that the cap costs during 2023 to 2024 will be distributed on the same basis as means test funding for adults aged under 65 (see the ‘Distributing funding for costs associated with the means test for adults aged under 65’ section above).

Do you agree or disagree with the proposal to distribute cap funding in the same way as means test funding for adults aged under 65 in 2023 to 2024?

  • strongly agree
  • agree
  • neither agree nor disagree
  • disagree
  • strongly disagree

Please explain your preference.

5. Distributing funding for implementation and additional assessments

Background

As described in chapter 3, local authorities are required to conduct needs and financial assessments for all individuals that may have a care and support need. This is to determine:

  • whether or not a person has a care and support need
  • which of those needs are eligible to be met by the local authority
  • how the support provided to meet those eligible needs is paid for

The introduction of reforms generates additional assessments for existing self-funders with care and support needs and those who are impacted by the changes to the means test. The reforms also result in a higher long-term baseline of assessments, as people who do not contact their local authority in the current system may now do so in order to access means test support and/or the cap.

To help manage the overall demand for assessments, the operational guidance to implement a lifetime cap on care costs recommends that local authorities conduct these needs and financial assessments of self-funders (newly captured for the means test or seeking to access the cap) from April 2023 onwards (6 months in advance of ‘go live’). Local authorities have discretion to determine when (following April 2023) and for whom assessments are conducted early.

The government estimates a requirement of £247 million in funding to local authorities in financial year 2023 to 2024 to cover the costs of conducting the additional assessments generated through the introduction of reforms.[footnote 5]

Approach to distributing funding

The ASCRU programme at PSSRU has produced 2 formulae designed to predict the relative demand for new assessments. These formulae calculate additional assessments as the difference between the estimated total number of people seeking assessments post-reform and the number already assessed. They also take the number of people already assessed to equal the current number of local authority supported people accessing care.

Two different approaches are taken to quantify the number of assessments, by calculating the total demand for assessments using either a utilisation-based approach or a normative (needs proxy) approach. Further detail can be found in option 1 and option 2 below. Aside from a formula-based approach, local authorities have also told us that the number of people who self-fund their care in an area will be a significant driver of additional assessments. We have therefore developed a third option using ONS estimates of the numbers of self-funders.

We are therefore proposing 3 options for distributing implementation and assessments funding in 2023 to 2024. Under all 3 options, an area cost adjustment is applied to reflect differences in wages and prices in different local authorities.

Option 1: use ASCRU-PSSRU assessments formula (utilisation approach) 2022

This formula uses a utilisation-based approach, which takes the total demand for assessments to be equal to the number of people that would satisfy the current needs test for adult social care.

At the local authority level, the potential eligible need is multiplied by the population, and then the number of people currently receiving local authority support is subtracted.

This approach has the virtue of considering the people estimated to pass a needs eligibility assessment in the current system, but might underestimate the number of additional assessments from people with a lower level of need.

Option 2: use ASCRU-PSSRU assessments formula (normative approach) 2022

ASCRU-PSSRU assessments formula (normative approach) 2022 uses a normative approach, which calculates the total demand for assessments using an estimate for ‘potential eligible need’. This is measured by the England Longitudinal Study of Ageing (ELSA) data on the number of people in the population with 3 or more activities of daily living (ADLs) difficulties such as washing, dressing and feeding.

At the local authority level, this potential eligible need is multiplied by the population and then the number of people currently receiving local authority support is subtracted.

This approach offers an expansive and uniform definition of need which is not tied to the current needs eligibility test. It is focused on a person’s ADL difficulties (rather than potential care services used), and not affected by the availability of informal care. Data on ADLs is not routinely available, and so this is estimated using data from the ELSA.

Both the ASCRU-PSSRU assessments formula (utilisation approach) 2022 and the ASCRU-PSSRU assessments formula (normative approach) 2022 use the following metrics. The corresponding rates for each local authority are inserted into the formulae to give a ‘relative need’ adjustment for local authority funding allocations:

  • Attendance Allowance claimants aged 65 and over per person aged 65 and over
  • people with limiting (significantly) conditions aged 65 and over per person aged 65 and over
  • home-owner households aged 65 and over per household aged 65 and over, multiplied by properties in Council Tax bands A, B, C, D and E per all properties
  • home-owner households aged 65 and over per household aged 65 and over multiplied by properties in Council Tax bands F, G and H per all properties
  • Pension Credit claimants aged 65 and over per person aged 65 and over
  • couple households per households aged 65 and over

Full details of both formulae are available in section 3 of the technical annex.

Option 3: use ONS estimates of the number of self-funders

Throughout our stakeholder engagement, the sector has consistently told us that local authorities are using estimates of the numbers of self-funders locally as a basis for forecasting future demand, and have advised DHSC to consider self-funder numbers for the purpose of distributing funding. ONS estimates of the number of self-funders in 2021 to 2022 in care homes , published on 30 May 2022, represent an alternative option as a basis for distributing funding. However, it is worth noting that the ONS estimates we used only cover residential care settings, not care provided in the community.

Full details of this option are available in section 3 of the technical annex.

Tables exemplifying the results for each option can be found in Annex B.

Which option do you prefer for distributing £247 million of funding for assessments in 2023 to 2024?

  • option 1 – ASCRU-PSSRU assessments formula (utilisation approach) 2022
  • option 2 – ASCRU-PSSRU assessments formula (normative approach) 2022
  • option 3 – ONS estimates on the number of self-funders
  • none

Please explain your preference.

Is there anything else about the options for distributing funding that you wish to comment on?

6. Next steps

Finalising allocations for 2023 to 2024

We will study the responses to this consultation carefully. We will publish a written response to the submissions received and confirm our preferred approach by, at latest, the 2023 to 2024 provisional local government finance settlement.

Bringing forward proposals for future years

The distribution approaches proposed in this consultation predict relative funding needs based on current available information. We foresee that, as more information becomes available on the distribution of pressures, we will adjust our distribution approach to take those patterns into account, and that we will have a much stronger evidence base by the time of the next spending review period (from 2025 to 2026 onwards). We will continue to work with the care sector.

We anticipate the need for a further consultation for 2024 to 2025 funding. This will include the development of an approach for distributing local authorities’ costs for people reaching the cap on care costs.

If you have further questions on the content of this consultation please contact [email protected]. Please do not use this email address to respond to the consultation.

Annex A: tables exemplifying indicative results for options to allocate funding for the extension to means test and cap on personal care costs (2023 to 2024)

Results for allocating funding for people aged 65 and over

Local authority ASCRU-PSSRU means test extension formula for people aged 65 and over (2022) (£)
Barking and Dagenham 638,197
Barnet 1,931,429
Barnsley 1,619,100
Bath and North East Somerset 1,314,004
Bedford 1,085,108
Bexley 1,518,602
Birmingham 4,977,978
Blackburn with Darwen 716,587
Blackpool 973,923
Bolton 1,650,024
Bournemouth, Christchurch and Poole 3,099,172
Bracknell Forest 622,592
Bradford 2,660,680
Brent 1,270,063
Brighton and Hove 1,311,899
Bristol, City of 2,180,349
Bromley 1,994,973
Buckinghamshire 3,371,042
Bury 1,200,862
Calderdale 1,306,161
Cambridgeshire 4,337,524
Camden 859,570
Central Bedfordshire 1,793,237
Cheshire East 3,156,443
Cheshire West and Chester 2,651,393
City of London 45,171
Cornwall 4,988,900
County Durham 3,631,206
Coventry 1,831,057
Croydon 1,849,018
Cumbria 4,423,398
Darlington 732,126
Derby 1,499,829
Derbyshire 6,267,886
Devon 7,381,050
Doncaster 2,026,738
Dorset 3,933,738
Dudley 2,264,971
Ealing 1,458,990
East Riding of Yorkshire 3,035,196
East Sussex 5,240,244
Enfield 1,517,106
Essex 10,782,725
Gateshead 1,261,292
Gloucestershire 5,018,968
Greenwich 911,013
Hackney 489,616
Halton 798,617
Hammersmith and Fulham 519,773
Hampshire 10,390,903
Haringey 763,625
Harrow 1,374,706
Hartlepool 604,007
Havering 1,715,394
Herefordshire, County of 1,664,381
Hertfordshire 6,959,522
Hillingdon 1,451,866
Hounslow 1,035,222
Isle of Wight 1,495,695
Isles of Scilly 13,906
Islington 494,369
Kensington and Chelsea 596,503
Kent 11,081,374
Kingston upon Hull, City of 1,118,051
Kingston upon Thames 873,009
Kirklees 2,611,666
Knowsley 826,745
Lambeth 714,842
Lancashire 9,062,315
Leeds 3,994,493
Leicester 1,362,185
Leicestershire 5,358,969
Lewisham 864,698
Lincolnshire 6,198,809
Liverpool 2,225,815
Luton 883,146
Manchester 1,459,206
Medway 1,547,867
Merton 892,659
Middlesbrough 741,535
Milton Keynes 1,281,126
Newcastle upon Tyne 1,434,617
Newham 742,428
Norfolk 7,816,479
North East Lincolnshire 1,157,367
North Lincolnshire 1,277,808
North Northamptonshire 2,260,837
North Somerset 1,856,291
North Tyneside 1,421,576
North Yorkshire 5,306,067
Northumberland 2,655,530
Nottingham 1,254,027
Nottinghamshire 6,223,493
Oldham 1,286,645
Oxfordshire 4,465,397
Peterborough 1,052,779
Plymouth 1,655,968
Portsmouth 1,071,714
Reading 691,655
Redbridge 1,408,742
Redcar and Cleveland 1,038,072
Richmond upon Thames 1,056,398
Rochdale 1,176,486
Rotherham 1,751,820
Rutland 334,636
Salford 1,147,037
Sandwell 1,638,990
Sefton 2,313,504
Sheffield 3,073,722
Shropshire 2,842,316
Slough 496,179
Solihull 1,610,854
Somerset 5,036,077
South Gloucestershire 1,968,093
South Tyneside 958,701
Southampton 1,125,942
Southend-on-Sea 1,292,034
Southwark 713,335
St Helens 1,315,632
Staffordshire 6,751,206
Stockport 2,123,194
Stockton-on-Tees 1,248,244
Stoke-on-Trent 1,501,821
Suffolk 6,410,775
Sunderland 1,754,559
Surrey 7,728,378
Sutton 1,121,954
Swindon 1,261,198
Tameside 1,333,863
Telford and Wrekin 1,047,661
Thurrock 826,161
Torbay 1,348,062
Tower Hamlets 476,900
Trafford 1,449,987
Wakefield 2,167,221
Walsall 1,687,540
Waltham Forest 968,769
Wandsworth 901,655
Warrington 1,389,907
Warwickshire 4,189,402
West Berkshire 1,017,892
West Northamptonshire 2,468,586
West Sussex 7,181,579
Westminster 821,308
Wigan 2,085,527
Wiltshire 3,785,388
Windsor and Maidenhead 920,771
Wirral 2,543,139
Wokingham 1,028,186
Wolverhampton 1,472,990
Worcestershire 4,818,032
York 1,430,748
Total 355,000,000

Results for allocating means test and cap funding for adults aged under 65

Local authority Option 1: ASCRU-PSSRU means test extension formula for people aged 18 to 64 (£) Option 2: per capita (18 to 64) distribution (£) Option 3: ASCRU-PSSRU means test extension formula for people aged 65 and over (2022) (£)
Barking and Dagenham 469,237 684,670 305,616
Barnet 1,148,449 1,332,534 924,910
Barnsley 847,893 715,241 775,344
Bath and North East Somerset 653,527 609,537 629,241
Bedford 510,424 512,117 519,629
Bexley 719,579 781,568 727,218
Birmingham 3,503,243 3,474,753 2,383,821
Blackburn with Darwen 531,007 424,806 343,155
Blackpool 434,059 385,085 466,386
Bolton 916,103 815,069 790,153
Bournemouth, Christchurch and Poole 1,127,525 1,118,130 1,484,111
Bracknell Forest 312,238 400,920 298,142
Bradford 1,701,892 1,518,411 1,274,128
Brent 849,467 1,140,496 608,199
Brighton and Hove 873,350 987,607 628,233
Bristol, City of 1,434,940 1,590,873 1,044,111
Bromley 974,944 1,035,830 955,339
Buckinghamshire 1,589,749 1,622,155 1,614,302
Bury 605,653 552,467 575,061
Calderdale 677,761 594,359 625,486
Cambridgeshire 1,961,034 1,941,687 2,077,124
Camden 746,743 1,094,685 411,625
Central Bedfordshire 851,438 874,369 858,733
Cheshire East 1,229,706 1,052,480 1,511,536
Cheshire West and Chester 1,109,948 977,311 1,269,681
City of London 25,228 35,107 21,631
Cornwall 2,021,376 1,570,188 2,389,051
County Durham 1,845,849 1,518,753 1,738,888
Coventry 1,200,484 1,236,563 876,844
Croydon 988,817 1,225,178 885,445
Cumbria 1,767,284 1,343,213 2,118,247
Darlington 314,164 294,178 350,595
Derby 794,077 748,176 718,228
Derbyshire 2,798,520 2,287,806 3,001,523
Devon 2,706,263 2,209,010 3,534,587
Doncaster 1,014,934 893,379 970,551
Dorset 1,187,869 951,854 1,883,762
Dudley 1,054,533 913,972 1,084,634
Ealing 883,663 1,118,872 698,671
East Riding of Yorkshire 1,091,941 896,926 1,453,474
East Sussex 1,661,951 1,479,409 2,509,413
Enfield 905,309 1,052,974 726,502
Essex 4,511,388 4,302,374 5,163,559
Gateshead 603,655 587,785 603,999
Gloucestershire 1,989,439 1,837,933 2,403,449
Greenwich 707,176 1,131,871 436,260
Hackney 624,055 1,167,617 234,464
Halton 404,968 368,962 382,436
Hammersmith and Fulham 501,838 753,626 248,905
Hampshire 3,960,148 3,943,370 4,975,926
Haringey 666,615 940,959 365,680
Harrow 712,957 794,542 658,310
Hartlepool 295,541 260,524 289,243
Havering 792,385 812,361 821,456
Herefordshire, County of 657,361 530,935 797,028
Hertfordshire 3,316,882 3,631,336 3,332,729
Hillingdon 848,920 1,031,417 695,260
Hounslow 688,297 917,541 495,740
Isle of Wight 477,806 381,704 716,248
Isles of Scilly 4,601 7,347 6,657
Islington 631,403 1,046,384 236,740
Kensington and Chelsea 482,526 578,235 285,649
Kent 4,743,751 4,532,956 5,306,568
Kingston upon Hull, City of 694,658 778,135 535,405
Kingston upon Thames 501,039 604,566 418,060
Kirklees 1,456,396 1,256,388 1,250,657
Knowsley 468,177 432,950 395,906
Lambeth 760,301 1,376,271 342,319
Lancashire 4,145,568 3,424,254 4,339,700
Leeds 2,314,393 2,394,647 1,912,856
Leicester 1,058,405 1,118,418 652,314
Leicestershire 2,385,356 2,075,132 2,566,267
Lewisham 734,628 1,230,389 414,081
Lincolnshire 2,441,169 2,099,642 2,968,444
Liverpool 1,528,412 1,589,579 1,065,883
Luton 547,852 629,053 422,915
Manchester 1,459,244 1,843,941 698,775
Medway 795,368 807,101 741,232
Merton 564,134 701,854 427,471
Middlesbrough 430,638 396,007 355,101
Milton Keynes 673,076 833,619 613,497
Newcastle upon Tyne 897,328 946,621 687,000
Newham 813,507 1,269,816 355,529
Norfolk 2,980,198 2,507,904 3,743,103
North East Lincolnshire 468,515 434,253 554,232
North Lincolnshire 540,584 476,433 611,908
North Northamptonshire 1,055,005 1,022,393 1,082,654
North Somerset 647,210 607,346 888,928
North Tyneside 618,627 596,977 680,755
North Yorkshire 1,996,058 1,645,485 2,540,934
Northumberland 1,028,127 868,529 1,271,662
Nottingham 924,282 1,081,733 600,520
Nottinghamshire 2,825,112 2,396,586 2,980,264
Oldham 772,030 690,180 616,140
Oxfordshire 2,041,289 2,118,402 2,138,359
Peterborough 569,262 614,710 504,148
Plymouth 772,063 767,941 792,999
Portsmouth 596,400 701,312 513,215
Reading 411,192 547,516 331,215
Redbridge 872,785 983,442 674,609
Redcar and Cleveland 460,330 373,295 497,105
Richmond upon Thames 579,511 647,273 505,881
Rochdale 700,079 652,834 563,388
Rotherham 862,041 751,239 838,900
Rutland 125,652 106,929 160,248
Salford 743,714 826,636 549,285
Sandwell 1,024,217 975,334 784,869
Sefton 877,828 742,794 1,107,875
Sheffield 1,871,445 1,818,591 1,471,923
Shropshire 1,083,034 897,007 1,361,109
Slough 343,092 481,928 237,607
Solihull 688,736 604,148 771,395
Somerset 1,769,852 1,505,108 2,411,643
South Gloucestershire 909,470 891,548 942,467
South Tyneside 457,016 429,072 459,096
Southampton 678,150 837,286 539,183
Southend-on-Sea 513,533 532,157 618,721
Southwark 710,075 1,337,094 341,597
St Helens 611,892 514,070 630,021
Staffordshire 2,922,357 2,488,834 3,232,972
Stockport 917,989 832,514 1,016,741
Stockton-on-Tees 601,229 557,165 597,750
Stoke-on-Trent 822,715 745,142 719,182
Suffolk 2,333,438 2,055,927 3,069,949
Sunderland 881,857 786,503 840,211
Surrey 3,462,701 3,678,947 3,700,913
Sutton 557,737 675,060 537,274
Swindon 601,641 676,303 603,954
Tameside 697,963 663,527 638,751
Telford and Wrekin 540,963 529,147 501,697
Thurrock 473,476 554,469 395,627
Torbay 411,283 359,765 645,551
Tower Hamlets 737,435 1,417,107 228,375
Trafford 719,387 686,540 694,360
Wakefield 1,135,605 1,029,629 1,037,824
Walsall 887,681 822,207 808,118
Waltham Forest 712,998 947,648 463,917
Wandsworth 922,738 1,360,561 431,778
Warrington 652,304 606,586 665,589
Warwickshire 1,807,990 1,691,863 2,006,193
West Berkshire 430,426 467,842 487,441
West Northamptonshire 1,181,206 1,185,076 1,182,140
West Sussex 2,511,552 2,412,248 3,439,066
Westminster 734,768 1,060,643 393,302
Wigan 1,064,723 960,446 998,703
Wiltshire 1,471,978 1,424,096 1,812,721
Windsor and Maidenhead 419,107 460,897 440,933
Wirral 1,031,603 885,457 1,217,841
Wokingham 518,583 532,654 492,371
Wolverhampton 813,217 775,761 705,376
Worcestershire 1,879,836 1,659,758 2,307,227
York 679,576 643,313 685,147
Total 170,000,000 170,000,000 170,000,000

Allocations are subject to change as there will be some updates to the DHSC charging reform model for the final impact assessment.

Annex B: table exemplifying indicative results for options to allocate funding for implementation and additional assessments (2023 to 2024)

Local authority Option 1: 2022 ASCRU-PSSRU assessments formula (utilisation approach) 2022 (£) Option 2: 2022 ASCRU-PSSRU assessments formula (normative approach) 2022 (£) Option 3: ONS reported self-funder population in care homes (£)
Barking and Dagenham 444,479 550,167 162,551
Barnet 1,473,936 1,467,531 1,221,920
Barnsley 1,099,704 1,249,792 1,028,537
Bath and North East Somerset 918,353 821,441 933,172
Bedford 775,252 708,953 773,287
Bexley 1,155,140 1,008,491 1,162,002
Birmingham 3,455,578 3,981,812 3,187,284
Blackburn with Darwen 506,653 578,084 454,120
Blackpool 701,219 763,538 612,010
Bolton 1,156,068 1,223,882 679,239
Bournemouth, Christchurch and Poole 2,080,333 1,895,912 2,953,286
Bracknell Forest 454,611 422,563 375,930
Bradford 1,822,098 1,927,341 1,809,686
Brent 964,370 1,146,577 270,056
Brighton and Hove 921,684 826,054 1,212,309
Bristol, City of 1,541,900 1,530,458 1,729,479
Bromley 1,524,399 1,319,021 1,350,304
Buckinghamshire 2,461,372 2,330,745 3,370,540
Bury 860,145 818,317 420,336
Calderdale 898,836 829,393 740,121
Cambridgeshire 2,919,329 2,770,728 2,696,759
Camden 710,911 720,135 151,220
Central Bedfordshire 1,253,745 1,132,946 1,002,467
Cheshire East 2,199,735 2,067,544 2,508,277
Cheshire West and Chester 1,845,491 1,816,049 1,536,206
City of London 49,307 29,123 20,678
Cornwall 3,338,753 3,182,775 2,703,670
County Durham 2,456,423 2,846,501 1,604,458
Coventry 1,281,110 1,253,201 927,541
Croydon 1,410,925 1,328,671 1,332,600
Cumbria 3,083,899 2,886,605 2,622,470
Darlington 504,174 497,155 401,491
Derby 1,034,083 1,036,326 1,514,236
Derbyshire 4,211,756 4,224,839 3,687,096
Devon 4,912,096 4,549,729 5,139,680
Doncaster 1,356,201 1,501,891 971,397
Dorset 2,608,959 2,411,315 3,108,168
Dudley 1,546,537 1,653,470 1,354,937
Ealing 1,151,322 1,222,401 720,149
East Riding of Yorkshire 2,023,098 2,001,162 2,487,136
East Sussex 3,585,756 3,259,168 5,980,019
Enfield 1,139,134 1,182,712 661,472
Essex 7,423,066 7,257,171 6,460,398
Gateshead 831,635 1,019,043 503,743
Gloucestershire 3,455,957 3,122,888 4,542,797
Greenwich 708,347 825,609 176,424
Hackney 361,884 679,052 54,007
Halton 575,376 642,131 84,924
Hammersmith and Fulham 432,452 474,538 144,019
Hampshire 7,220,017 6,506,470 10,126,006
Haringey 578,835 685,243 90,128
Harrow 1,043,392 1,081,245 470,098
Hartlepool 420,970 526,969 255,631
Havering 1,300,488 1,166,965 1,268,223
Herefordshire, County of 1,112,626 1,074,455 1,354,843
Hertfordshire 5,008,917 4,845,112 7,036,593
Hillingdon 1,139,927 1,079,943 913,523
Hounslow 795,420 808,785 443,425
Isle of Wight 1,062,570 954,896 954,023
Isles of Scilly 12,894 13,878 11,278
Islington 377,107 609,143 237,632
Kensington and Chelsea 512,541 518,653 237,632
Kent 7,575,827 7,308,132 8,554,038
Kingston upon Hull, City of 718,071 993,007 406,002
Kingston upon Thames 686,742 560,805 851,843
Kirklees 1,787,787 1,733,582 1,608,109
Knowsley 619,424 774,633 205,036
Lambeth 579,615 781,654 178,224
Lancashire 6,329,081 6,264,985 5,738,157
Leeds 2,707,427 2,708,319 2,682,187
Leicester 904,513 1,140,400 987,937
Leicestershire 3,606,062 3,326,680 3,246,509
Lewisham 713,072 754,830 505,868
Lincolnshire 4,078,006 4,242,664 4,808,864
Liverpool 1,622,508 2,057,217 793,008
Luton 638,891 659,746 271,274
Manchester 1,009,635 1,400,350 595,476
Medway 1,083,206 993,437 617,569
Merton 710,931 605,308 655,136
Middlesbrough 525,638 603,240 457,128
Milton Keynes 887,626 952,298 1,155,535
Newcastle upon Tyne 974,483 1,141,081 1,112,745
Newham 528,646 814,995 149,676
Norfolk 5,064,985 5,075,857 5,616,356
North East Lincolnshire 781,889 815,224 696,218
North Lincolnshire 846,359 891,462 747,344
North Northamptonshire 1,496,168 1,510,139 1,566,808
North Somerset 1,298,670 1,205,818 1,650,160
North Tyneside 965,678 1,001,568 551,861
North Yorkshire 3,574,178 3,362,770 3,953,253
Northumberland 1,747,157 1,856,750 1,242,064
Nottingham 861,037 969,016 806,687
Nottinghamshire 4,278,342 4,238,815 4,252,890
Oldham 917,864 950,819 587,862
Oxfordshire 3,146,375 2,802,859 4,592,700
Peterborough 714,826 766,735 766,741
Plymouth 1,127,702 1,145,668 1,105,227
Portsmouth 759,963 696,787 522,071
Reading 515,429 475,938 369,196
Redbridge 1,045,396 1,056,626 244,632
Redcar and Cleveland 713,697 765,464 556,373
Richmond upon Thames 858,191 659,854 511,773
Rochdale 834,561 914,935 720,359
Rotherham 1,141,949 1,363,128 751,855
Rutland 217,405 208,852 473,669
Salford 794,230 896,330 332,005
Sandwell 1,091,243 1,454,323 460,739
Sefton 1,675,518 1,670,499 1,632,752
Sheffield 2,010,792 2,291,736 2,339,772
Shropshire 1,917,169 1,851,914 2,141,283
Slough 363,243 407,249 181,370
Solihull 1,124,466 1,089,282 1,623,196
Somerset 3,350,881 3,098,732 3,802,882
South Gloucestershire 1,378,761 1,283,927 1,208,458
South Tyneside 633,468 768,040 356,379
Southampton 780,003 774,057 651,035
Southend-on-Sea 887,663 828,128 923,360
Southwark 522,656 817,515 127,817
St Helens 940,250 1,023,712 453,793
Staffordshire 4,592,813 4,561,965 4,241,965
Stockport 1,532,521 1,406,627 1,408,735
Stockton-on-Tees 857,103 929,158 509,758
Stoke-on-Trent 1,040,716 1,138,703 634,566
Suffolk 4,185,677 4,027,022 5,174,783
Sunderland 1,191,705 1,529,425 830,048
Surrey 5,903,034 5,322,796 10,705,768
Sutton 887,265 739,184 885,184
Swindon 852,999 822,257 599,357
Tameside 949,789 976,246 581,770
Telford and Wrekin 693,090 809,461 604,491
Thurrock 579,782 603,670 131,161
Torbay 902,700 910,813 1,021,019
Tower Hamlets 329,901 750,886 176,424
Trafford 1,030,534 949,737 1,038,657
Wakefield 1,443,649 1,608,850 1,125,225
Walsall 1,147,161 1,382,738 842,668
Waltham Forest 715,949 736,975 263,945
Wandsworth 776,091 756,084 820,910
Warrington 997,883 965,500 909,895
Warwickshire 2,885,688 2,745,557 3,010,890
West Berkshire 730,947 651,096 679,840
West Northamptonshire 1,648,516 1,585,645 2,074,430
West Sussex 5,006,788 4,417,009 7,564,529
Westminster 686,420 722,105 185,425
Wigan 1,487,647 1,576,567 702,083
Wiltshire 2,550,591 2,388,483 3,401,963
Windsor and Maidenhead 690,187 649,879 1,079,976
Wirral 1,829,834 1,808,739 1,598,077
Wokingham 764,348 676,353 1,210,051
Wolverhampton 1,008,535 1,174,322 1,003,320
Worcestershire 3,229,685 3,161,343 3,757,771
York 991,802 840,207 1,180,412
Total 247,000,000 247,000,000 247,000,000

Notes:

  1. Allocations are subject to change as there will be some updates to the DHSC charging reform model for the final impact assessment.

  2. The ONS report did not include the proportion of self-funding people in care home beds for all upper tier local authorities (UTLAs). For UTLAs with no values, we assumed that the proportion at the UTLA level is the same as at the regional level. Where UTLAs were combined, we assumed the proportions for the UTLAs separately are the same as the proportion for the combined UTLAs.

  1. These estimates are indicative, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed. ↩

  2. These estimates are indicative, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed. ↩

  3. These estimates are indicative, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed. ↩

  4. Personal Independence Payments are available to adults aged 16 to 64 with a long-term physical or mental health condition or disability with difficulty completing certain everyday tasks or getting around. ↩

  5. These estimates are indicative, based on the consultation stage impact assessment, and may change before final funding allocations are confirmed. ↩

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