Social Care Funding Reforms – What They Mean for Care Homes

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Posted by: Amber
Posted on: 01/02/2023

Jeremy Hunt’s November 2022 statement announced a two-year delay to the recently proposed adult social care funding reforms, which sought to make care more accessible and affordable for the public. But what exactly could this mean for the future of social care homes and workers?

Let’s take a closer look at some of the planned reforms from the Health and Care Act 2022, and the impact their implementation may have.

Addressing the Funding Gap

A significant funding gap was projected for the future of adult social care by the government in October 2020. This funding gap could directly affect many care home professionals, ­in 2021, the ADASS reported an ‘impending crisis in the retention of social care staff’ and a growing need for more funding in the sector.

The proposed changes aim to address the undue financial pressure placed on care homes, patients and families through a variety of policies and a supporting £5.4 billion investment.

Though implementation has been delayed, Hunt also announced the “biggest increase in funding” in the history of the adult social care sector in the intervening two years. This, coupled with the high demand for social care workers in the UK, makes now a challenging time for care home managers looking to attract and retain the best talent in the sector. On the flipside, it’s a great time for care home workers to think about the next step in their career.

Here is an overview of three of the key reforms which should come into effect in October 2025:

Care cost caps

The introduction of an £86,000 cap on eligible care costs will limit the amount people spend on their care and support needs across their lifetime. Before this, the amount one could pay for personal care was unlimited. The cap aims to ensure that people will ‘no longer face unpredictable or unlimited care costs’, and means the cost of care beyond the cap will be fully subsidised by the government.

It’s important to note that only money spent on directly meeting personal care needs will count towards the cap – daily living costs (‘hotel costs’) are not included. Additionally, the cap will not apply retrospectively, meaning the count towards £86,000 only starts after implementation of the policy.

Changes to social care means test

Currently, only individuals with less than £23,250 in assets are eligible for state support. The reforms proposed to increase this upper capital limit to £100,000, meaning more people will be eligible for help from their local authorities.

The lower limit, which refers to the amount below which somebody will not have to contribute towards their care costs from their capital, is to increase from £14,250 to £20,000.

These changes mean far more people in the UK will be able to access care homes and social care services – with this will come a higher demand for care workers, facilities and resources, which should be supported by the government’s growing focus on funding social care.

Fair cost of care reforms

Local authorities, as large-scale purchasers of social care, are presently able to sometimes obtain lower fee rates from care providers. These fees can be less than the cost of providing the care, which contributes to the undue financial pressure placed on care providers.

The Government’s reforms aim to address this issue by providing further economic support not only to individuals, but also to local authorities. This will enable authorities to increase the rates paid to providers where necessary. Providers then won’t need to charge as much to people who fund their own care, which should reduce some of the financial stress on patients and care homes in the UK.

Social Care Funding Leading Up to 2025

While the implementation of care cost caps and changes to the social care means test has been delayed until 2025, the money allocated will still be spent on social care in the coming years. £1.3bn will be available for councils to put towards the delivery of care packages and social care services in 2023-24, and £1.9bn in 2024-25.

Hopefully this much-needed funding will help move towards a fair cost of care and allow more people to access social care services. Further, with an influx of patients will come the need for more care workers and higher budgets for care home managers.


We’ve covered  three important upcoming social care funding reforms, along with the ways they might affect the future of work in care homes. If you’d like to view the changes in full, see here for more details.

As a specialist healthcare recruitment agency, we’re up to date on the latest changes to policy and funding, as well as current opportunities in social care.  Whether you’re a care home manager or a care worker embarking on a job search, interested in learning more about how these reforms and other trends in healthcare might impact you, or would simply like some further career support, please connect with one of our experts – we’d love to help.

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