The question of how to pay for adult social care is perhaps the greatest unresolved policy issue of our time
What's wrong with the system?
Adult social care covers a large range of services given to the frail and disabled, from home visits to end-of-life care; the sector employs 1.6 million people in England (about the same as the NHS). There are many concerns about the sector: staff shortages, low pay, rising costs, poor conditions, patchy quality etc. But with a rapidly ageing society, the main area of worry is old-age care, and how to pay for it. Unlike the NHS, care is not free: there is both a needs assessment and a means test; only those with high needs and few assets qualify. Those with "healthcare needs" – cancer, say – have their treatment paid for by the state, but most with "social care needs" – trouble with eating, washing, mobility, etc – pay for them, even though the dividing line is often unclear. With health, the costs are pooled across society; with care, the unlucky ones pay very large bills. Polls suggest that more than a quarter of Britons are unaware of this situation.
How does the current system work?
In most cases, only people with assets worth less than £23,250 get any state support in England and Northern Ireland – the threshold is £35,000 in Scotland and £50,000 in Wales. Below that, there is a sliding scale: those with £14,250 or less receive full funding. Provided you still live in it, the value of your home isn't included in the calculation; but if you have to move out to go into residential care, it is taken into account (unless your partner is still living there). Publicly funded social care is provided by local authorities, and mainly outsourced to thousands of private providers. For those who pay, residential care costs on average more than £1,000 per week. In many parts of the country it is higher than that, and there may be many additional costs. Care at home costs from £23-34 per hour, though again it can be higher.
And what effects does this have?
Those without state support have to rely on friends or family, go without care, or pay for it themselves. The most recent official estimate is that one in seven adults aged 65 and over face lifetime care costs of over £100,000; some 20,000 families sell homes to pay for it every year. Yet despite high costs, the quality of care is often low: stories of ill-treatment are common; many people receive disjointed care from different providers. The dysfunctional system means that there is thought to be a large amount of unmet need. The Nuffield Trust estimates that fewer than half of older people with care needs receive support. This puts great pressure on the 5.7 million self-identified unpaid carers in England and Wales. And the situation is likely to get worse.
Why will it get worse?
Because elderly sections of the population are growing much faster than the working-age population; the number of people over 75 has grown by over 20% in the past decade. In the meantime, state funding has fallen in real terms, because the threshold of £23,250 has stayed the same since 2010. The current system needs cash just to stay afloat. In 2023/24, £27 billion was spent on adult social care by local authorities in England, split between the elderly and the disabled of working age; 858,720 people received long-term care. This is only the tip of the iceberg. The scale of the unmet need is massive: over two million requests for social care were made last year. And many authorities are already in dire financial straits.
Why hasn't this been fixed?
Many governments have tried, though half-heartedly: there have been two major commissions and dozens of official inquiries and papers on reforming social care since 1997. Politically, it is very difficult. In 2010, the then Labour health secretary, Andy Burnham, outlined plans for a National Care Service funded from a £20,000 levy on estates at death. This was branded a "death tax", and Labour lost the election. At the 2017 election, Theresa May's Tory manifesto unexpectedly proposed that the value of a person's home should be included in the calculation of assets for care assessments, though to soften the blow, the means-testing threshold would be raised from £23,250 to £100,000. This "dementia tax", as it was dubbed, contributed to May's disastrous campaign. As George Osborne once noted, working out who pays for social care "is incredibly unpopular. It's much more straightforward politically to keep kicking the can down the road." He should know: as chancellor, he delayed what is widely seen as the most promising attempt at reform.
What reforms did Osborne delay?
In 1999, the Sutherland Commission argued for free personal care funded by general taxation; a minority of commissioners rejected this as unaffordable. In 2011, the Dilnot Commission instead recommended a cap: no one should have to contribute more than £35,000 (over £50,000 in today's money) towards the cost of care over a lifetime, nor more than £10,000 per year for food and accommodation. Beyond that, the state should pay; those with less than £100,000 would pay nothing. The idea was that if people knew the state would step in when costs become catastrophically high, they would be encouraged to save for their own care; at the same time private insurers, who won't currently get involved because costs can be so high, could be coaxed into the market. The Dilnot proposals partially made it into law in 2014, but councils objected to the cost, and the plans were delayed by Osborne until 2020.
Have they now been abandoned?
In theory, no; but in 2017 they were postponed indefinitely. They were revived by Boris Johnson; in 2022, under Rishi Sunak, a less generous version of the Dilnot cap was set to be introduced in October 2025 – safely after the next election. This month, Keir Starmer's government announced it would not introduce the cap, and instead appointed a new commission. It will not report in full until 2028.
Baroness Casey's challenge
Baroness Casey, a former civil servant and Whitehall "troubleshooter", has been charged with leading the new commission. Its remit is to "rebuild the adult social care system to meet the current and future needs of the population". An interim report will be delivered in 2026; this will identify the main problems with the current system. The final report, which will cover funding, is not expected until 2028.
The response from the sector was fairly uniform. The attempt to break the cycle of failure, and reach a cross-party consensus, was welcomed. But the plan to report by 2028 was, said the King's Fund health think tank, "far too long to wait for people who need social care. The issues and the potential solutions to this are clear and do not require years to consider." Age UK estimates that 2.6 million people in the UK cannot access the care they need to go to the toilet, eat and wash. Care failures also have a major knock-on effect on the NHS. The NHS Confederation estimated that in 2019/20 alone, 855,000 emergency admissions to hospital of older people could have been avoided with the right care at the right time. And as of September 2024, 13% of NHS hospital beds were occupied by people waiting for social care.
