The UK Government has scrapped the long-promised Dilnot cap on care costs in a bid to cover a £22 billion public finance shortfall that Labour claims the Conservative Party “covered up”.

Chancellor Rachel Reeves announced yesterday a raft of measures intended to fix what she described as a “£22 billion hole in the public finances”.

It is claimed that by not introducing the long-planned cap on care costs, which had its genesis in a 2011 report from Andrew Dilnot, the government could save as much as £1 billion a year.

A cap on care costs would have included measures such as a £35,000 lifetime cap on care costs, as well as food and accommodation costs limited at £10,000 per year and a raising of the assets threshold from just over £20,000 to £100,000. This last figure had been revised to £86,000 in the most recent proposals.

With these plans first put forward in July 2011, successive Conservative governments had delayed the plans, with former-chancellor Jeremy Hunt last delaying the move until October 2025.

Other cost-cutting measures the government is now proposing include reining in spend on the winter fuel allowance, along with cuts to road works and hospitals.

Reeves told the Commons: “If we cannot afford it, we cannot do it.”

With the General Election now almost one month in the rear-view mirror, it might have been expected that the war of words between the Labour and Conservative parties would have died down, but Reeves’ announcement has sparked yet more pot-shots from both sides.

Reeves herself was arguably the instigator, placing the blame firmly at the door of the Tories.

She said: “Let me be clear, this is not a decision I wanted to make, nor is it the one that I expected to make, but these are the necessary and urgent decisions that I must make.”

In response to uproar from Conservatives in the Commons, she added: “I can understand why members are angry. I am angry too. The previous government let people down.”

She also said: “Upon my arrival at the Treasury three weeks ago, it became clear that there were things that I did not know, things that the party opposite covered up; covered up from the opposition, covered up from this house, covered up from the country.”

Former chancellor, and now shadow chancellor, Jeremy Hunt, unsurprisingly did not take kindly to Reeves’ accusations. He responded: “She wants to blame the last Conservative government for tax rises and project cancellations she’s been planning all along,” and accused her of trying to hoodwink the British public, saying the government’s finances were always accessible to Reeves.

Meanwhile, Andrew Dilnot, the man who originally created the plans for a cap on care costs in 2011, commented to BBC Radio 4: “I think it’s a tragedy, and it’s very disappointing given what was said in the election campaign.

“Wes Streeting, [now health and care minister], said we don’t have any plans to change that situation. That’s the stability and certainty they want to give.

“Later on, on another BBC programme, he said one of the things that we’ve committed to is this. ‘I want to give the sector the certainty this side of the election.’ So to rip this up is unbelievably disappointing for hundreds of thousands of families who need care, for those who are providing it, for those who are trying to make decisions about [it].

“It’s another example of social care, something that affects people at some of the most difficult times of their lives, being given too little attention, being ignored and being tossed aside and its very, very disappointing.”