How do you solve a problem like social care?

By Alexa Ngini, Senior Consultant

Picture two residents in the same care home.

 They sit in the same lounge, eat the same meals, and are helped to bed by the same overstretched staff. One is paying over £1,200 a week from the sale of their family home and the slow liquidation of a lifetime’s savings. The other, with no assets at all, has their place funded by the local council. They receive the same service.

This is not a rare injustice or a quirk of the system. It is the system: a structure that manages to be fiscally unsustainable, politically explosive, and morally questionable all at once.

The English care model: constant crisis

The basics are now grimly familiar. In England, if you have more than £23,250 in assets, you’re a “self-funder”. You pay the full cost of your care - often £40,000–£60,000 a year, more in the South East - until your wealth has been run down to the means-test threshold. Only at that point does the local authority start to help, and even then support only fully kicks in when you are down to just £14,250. 

Councils, meanwhile, are under a statutory duty to meet eligible care needs. They cannot say no to any resident who meets the criteria. They are compelled to purchase care in a market where, in many areas, they are a captive buyer.

That duty might have looked manageable in the 1960s when the population was younger, life expectancy lower, and much long-term care was delivered in institutions run by the NHS or charities. Social care was still a statutory duty, but it was not the budget-devouring monster of today.

The terms were set for today’s crisis when the 1990 NHS and Community Care Act shifted responsibility onto councils just as an ageing population and advances in medicine dramatically increased demand.

By the 2000s and 2010s, adult social care – means-tested and locally funded - was consuming up to two-thirds of local authority spending in some places. Worse, councils bound by law to meet need, found themselves without room for negotiation in a market shaped by private equity in which many care homes - structured around debt, sale-and-leaseback deals and guaranteed income streams ultimately underwritten by the taxpayer – set the prices.

The political price

Successive politicians have acknowledged the problem. None have followed through.

In 2009, Labour published a White Paper titled Building the National Care Service. It promised free personal care for those with the greatest needs, a cap on what individuals would have to pay, and a universal, nationally guaranteed system framed as “the biggest reform of care since 1948”. It was to be funded in part by an inheritance levy. The Conservative Party successfully branded this a “death tax”. Labour lost the 2010 election, and the idea was dropped.

Theresa May’s 2017 manifesto tried a different route. Instead of only counting housing wealth when someone entered residential care, her proposal would have included the home in means-testing for domiciliary care as well. People would have been allowed to keep £100,000 of assets, with payment deferred until after death via a charge on the estate. There was no lifetime cap on what an individual might have to pay. People with dementia - the leading cause of death in England – faced both years in care and the loss of everything above £100,000. The plan was christened the “dementia tax”, May was forced to promise a future cap - without setting a level – and the social care crisis saw off another political leader.

 Between Brown and May sits the Dilnot Commission of 2011, which recommended a more rational settlement: a lifetime cap on what anyone would pay for their care -initially £35,000, later floated around £72,000 - and a higher asset floor - around £100,000 - so people would not be driven into penury before getting help.

This model was legislated in the 2014 Care Act and then kicked down the road. It was revived by Boris Johnson with a new cap set at £86,000, scheduled for October 2023. Then it was delayed to at least 2025. It has never yet been implemented.

The moral absurdity

By focusing on technical detail, we ignore the moral contradiction at the heart of the process: the current system actively punishes savers. A care home resident with modest savings and a house can be forced to spend down almost everything; another who never accumulated assets is protected from day one. Additionally, because councils negotiate bulk rates with providers, self-funders often effectively cross-subsidise publicly funded residents. If we layer in the increasingly common experience of dementia, which can mean years of intensive care before death, the system is set to run down the next generation’s inheritance.

Against all of this, councils are portrayed as profligate when a statutory duty they cannot escape and a demand they cannot control tips them into effective bankruptcy.

What other countries do differently

Other Western European countries face the same demographic pressures but have made different choices. Germany funds care through a mandatory long-term insurance scheme. Workers and employers pay in; when care is needed, the system pays out defined benefits. It doesn’t eliminate all out-of-pocket costs, but it prevents the sort of open-ended liability seen in England. The Netherlands and Sweden treat long-term care like healthcare: as a universal, tax-funded right. Municipalities deliver services, but the entitlement is national and the risk is pooled across the whole population. France offers a national allowance for older people with care needs, topped up by family obligations and tax breaks for employing carers. Again, the guarantee is national; local authorities aren’t left alone to sink or swim. 

Across these systems the details differ, but the pattern is clear: everyone contributes, (through tax or social insurance), everyone is entitled to support when they need it, and the risk of catastrophic cost is spread across society.

Only the UK has clung to a patchwork of means-tested support administered by cash-strapped local authorities, laid over a heavily privatised provider market.

What would a National Care Service actually do?

Labour’s 2019 proposals dropped hints. We might hope that, at the simplest level, a National Care Service would see social care as a national risk, like health or pensions, rather than a local problem to be managed by local authorities.

A credible model would therefore pool risk nationally, ending the financial lottery faced by individuals and stabilising local government finances. National funding and entitlement frameworks could remove the threat of systemic collapse when demand spikes, establish consistent standards, and set workforce expectations around pay and progression. In principle, this could enable free personal care for older people and a clearer, rules-based system of support.

But national risk pooling need not mean operational centralisation. Finance, entitlement and workforce standards could sit at the national level, while delivery remains firmly neighbourhood-based. Indeed, if designed well, a National Care Service could create the financial conditions for relational practice and prevention to flourish. By absorbing catastrophic cost pressures nationally, councils and integrated neighbourhood teams would be better placed to focus on early intervention, multidisciplinary working and long-term relationships with individuals and families.

The challenge would be ensuring that national guarantees do not harden into top-down control. A system built around ring-fenced funding and standardised entitlements would have to coexist with a broader policy commitment to devolution and local discretion. The NHS already lives with this tension: nationally defined rights and funding streams, delivered through locally configured services. Any National Care Service would inherit the same contradiction and would need to manage it deliberately — protecting consistency and fairness while preserving space for local adaptation, integration and preventative practice.

None of this comes cheaply. Nationalising risk would require either higher general taxation, a dedicated levy, or reprioritisation elsewhere in the welfare state. It would also mean confronting highly financialised models of private provision and reconsidering the balance between public, not-for-profit and commercial care. The question is not simply whether reform is desirable, but whether there is political appetite to reallocate longevity risk from local authorities and individual families to the national state.

Conclusion: confronting a shared risk

Social care is often presented as a technical problem in need of a clever funding mechanism. We will only solve it when we recognise this isn’t true. Solving social care is a political choice we have been dodging for decades.

And this is our choice now: We keep watching, while councils slide towards insolvency, private equity extracts profit from a captive market, and families see lifetime savings disappear in monthly increments to care homes. Or we confront a risk that should be shared, as other countries have, and build a system that treats care as a basic entitlement rather than a punishment for having lived too long.

Every government knows the costs of care – economic and societal - are too big to keep dumping onto local authorities and individual families. Instead of asking whether we can afford to fix social care, we should be asking how much longer we’re willing to live with the cost of not doing so.