Section 1 – Introduction: What’s the problem with social care?

There has been concern about the system of publicly funded social care for more than 20 years. Then, as now, some people faced huge care costs. In 1997 the newly elected prime minister, Tony Blair, told the Labour Party conference: ‘I don’t want [our children] brought up in a country where the only way pensioners can get long-term care is by selling their home’. The incoming Labour government set up the Sutherland Commission, which reported two years later that ‘doing nothing’ was ‘not an option’ and recommended, among other measures, introducing free personal care. However, its recommendations were not unanimous (two commissioners issued a note of dissent) and in England the government decided the increased expenditure required would be too great. Scotland, by contrast, chose to use their newly acquired powers of devolution to introduce FPC for those with eligible need.

The current system in England provides public funding only to those with the greatest need and the lowest means. A person will not qualify for any level of public funding until their assets are below £23,250 and will not receive full funding until their assets are below £14,250. If someone requires care in a residential or nursing home, their assets are likely to include the value of their home (see the interim report, Approaches to social care funding, for more detail).

For those who do not receive fully funded care, private contributions to social care costs can take different forms. Most commonly, people (‘self-funders’) make payments to social care providers directly for the full costs of their care. There are few private insurance products available to people who might want to insure themselves against future care costs. The Dilnot Commission argued that a cap on costs was a necessary precondition for an insurance market to develop, but this has not been implemented despite being enacted in the 2014 Care Act. Social care remains one of the few uninsurable risks in our society.

Since 1998 there have been further green papers, white papers and other consultations, as well as five independent commissions, including one by Dame Judith Barker in 2014, commissioned by The King’s Fund. This called for reforms including free personal care at the highest levels of need, starting with critical needs, a single budget for health and care, and the end of the distinction between NHS continuing health care and social care. It proposed a range of measures to pay for this, including better targeting of universal benefits and new wealth taxes.

Even as these commissions have been reporting, long-term demographic trends that make them more and more urgent have continued to roll out. There are two complementary trends at work:

  • the demographic ‘bulge’ of people – the baby boomer generation – born in the 20 or so years after the Second World War, who are now reaching retirement in the first decades of the 21st century;
  • the increased longevity of that population, with life expectancy at birth now 79.5 years for men and 83.1 years for women.

As a consequence, the population aged 75 and over is projected to double in the next 30 years and the number of people aged over 85 in the UK is predicted to more than double in the next 23 years to over 3.4 million.

As the population ages, it is predicted that by 2030 there will be:

  • 45% more people living with diabetes
  • 50% more people living with arthritis, coronary heart disease or stroke
  • 80% more people (nearly 2 million in total) living with dementia.

These population trends have important, well-reported, impacts on health and care demand. They have been exacerbated by related trends in working-age disability, with more disabled people surviving longer and the costs of their support increasing. As a result, social care for people of working age now costs local authorities about as much as that for older people.

But these trends have played out at a time of public spending austerity, with falling real-terms public spending on social care in particular. Between 2009/10 and 2015/16, spending by councils on social care per adult resident fell by 11% in real terms, and the number of people receiving publicly funded social care services fell by 400,000. These cuts compounded restrictions councils had already placed on publicly funded social care: in 2006, 53% of councils supported people with ‘moderate’ levels of need but by 2010 only 25% said they planned to do so in future.

Spending reductions have affected providers of social care services, with an increasing number of local authorities reporting suppliers handing back contracts. A recent report by the Competitions and Markets Authority said that ‘Many care homes, particularly those that are most reliant on local authority funded residents, are not currently in a sustainable position’. The workforce is also under pressure, with high vacancy and turnover rates in the social care sector. The Care Quality Commission, which regulates care providers, said in 2016 that the system was at ‘tipping point’ and in 2017 that it ‘remained precarious’.

Public concern is also increasing, at least in part because of several high-profile scandals involving abuse or neglect in the care of older people. The collapse of care home provider Southern Cross Healthcare in 2011 and the withdrawal from the publicly funded home care market of several major suppliers has also focused concern on the sustainability of the market for providing social care.

However, the ageing society is of concern not just because of current and expected demand for services, but also because it implies fewer working-age people paying tax to fund public services generally. The baby boomer generation is now retiring and there will be more of them and fewer people to support them in that retirement. In 2016, there were an estimated 308 people of pensionable age for every 1,000 working-age people. By 2037, this is projected to increase to 365 people.

Combined, these two trends – increasing demand for services and the increasing ‘dependency ratio’ – have focused attention not just on how we can develop a better, fairer social care funding system but also on how we can pay for it.

Attempts to resolve the issue have created controversy. During the 2010 election campaign, there was a heated debate over the Labour Party's consideration of a tax on people’s estates – a so-called ‘death tax’ – to pay for social care. The issue was then addressed by the 2011 Commission on Funding of Care and Support (Dilnot Commission), which proposed a reformed means test and a cap on the lifetime cost of care that a person might face. However, implentation of the legislation for this was first delayed and then postponed indefinitely. During the 2017 general election there was a negative response to Conservative Party proposals that would have made the system more generous for many people (including, as a late addition, by introducing a cap on costs) but recouped some of the public expense by requiring some people to pay more for care in their own home.

Pressures were recognised with new funding announced in the 2015 comprehensive spending review. This included a new ‘precept’ which allowed councils to add 2% onto council tax to pay for social care services, later raised to 3% for certain years. Additional funding from central government was also provided through the Improved Better Care Fund (IBCF). With later increases announced, this meant over £2bn of additional funding could be available in 2017/18, rising to £3.6bn by 2019/20, above what would have been spent (2018/19 prices). As a result, public spending on adult social care is expected to rise by an average of 2.5% a year between 2015/16 and 2019/20. However, this continues to lag behind growth in pressures, which are rising by at least 3.7% a year in real terms. Relying on the precept – and the move towards greater retention of business rates – also creates concerns about the level and equity of funding available for social care between different local authorities.

What the public thinks about social care

Previous research has found that public understanding of social care is often limited and there is a lack of clarity around the current offer. Those who have experience of using social care services, either for themselves or through friends and relatives, have more knowledge, but these services are not well understood. The deliberative work conducted by Ipsos MORI in 2008 to inform the green paper on care and support, Shaping the future of care together showed that many people often struggled to distinguish between social care and the health services provided by the NHS.

Recent polling conducted on behalf of Deloitte LLP showed that 63% of people think the NHS provides social care services for older people.

The lack of knowledge around social care is more pronounced when it comes to how social care is currently funded, coupled with a perceived lack of information available to people who want to start planning for future needs., Just under half (47%) of the public think social care is free at the point of need.

When it comes to planning for social care, few people have started saving for the care and support they may need in the future. Polling conducted on behalf of the Alzheimer’s Society showed that a quarter of people reported that they had started saving for the care and support they might need, but that nearly half of the population (47%) had not.

The literature review conducted on behalf of the Dilnot Commission points to a tension over people’s views of what they are responsible for when it comes to planning for old age. Most previous studies have found that people think responsibility for social care funding should either sit with the government through taxation, or should take the form of a partnership, with very few people thinking it should be solely the individual’s responsibility. When questions are framed in terms of ‘costs of retirement’, most people think it is their responsibility to plan for retirement, but this does not necessarily include social care. A recent report by Demos showed that more than half (57%) of the public agree that is their responsibility to save towards the costs they will face in retirement, but one in four still expect that social care costs will be met by the state.

The Ipsos MORI deliberative work in 2008 established that people were willing to see social care as a responsibility shared between themselves (and their families) and the state, but there has been persistent hostility towards using housing assets to pay for care.

Since the public has a limited understanding of social care, findings from survey research that examines their views needs to be interpreted carefully. However, it is clear that people’s perceptions of social care are broadly negative, which provides an important context for funding reform. Polling conducted on behalf of the Health Foundation in May 2017 found that only 8% of people thought the general standard of social care had improved over the previous year. Moreover, one in two people thought it would get worse over the next year. Overall, satisfaction with social care services was 23% in the British Social Attitudes survey in 2017, the lowest level recorded since the question was first asked in 2005, while dissatisfaction was 41%.

What next?

Despite previous controversy, the current minority Conservative government has pressed ahead with proposals for a green paper on social care funding before summer 2018. The momentum for action is being maintained by a wide-ranging group of providers, commissioners and users of social care services, along with journalists, opinion-formers and politicians from across the political spectrum. There is now even wider agreement than in 1999 that ‘doing nothing is not an option’.

What, though, is the best alternative to ‘doing nothing’? This report is structured around three linked pieces of work by the Health Foundation and The King’s Fund that looked at different aspects of that debate.

  • The first, Approaches to social care funding, considered five approaches which were chosen in consultation with stakeholders to reflect the solutions most commonly raised in the debate (rather than being a comprehensive list of all possible models).
  • The second, Social care funding options: How much and where from?, focused on funding and explored through financial modelling:
    • the current and predicted future gap between spending and demand for social care
    • the costs of restoring 2009/10 levels of access and quality, or introducing two of the five options (the ‘cap and floor’ model and free personal care)
    • four options for raising money (taxing income across the general population, taxing higher earners, taxing or redirecting existing spend on older people and taxing wealth).
  • The third looked at public attitudes to social care funding reform through a series of deliberative workshops and questions in the National Centre for Social Research's British Social Attitudes survey around perceptions of the current social care system and the priorities, principles and options for its reform.

In the next section of this overview report, we will revisit the analysis of the original funding options, drawing on the added financial analysis from the modelling paper. We then look at the results of the public attitudes work in greater depth. Finally, we draw out some of the key lessons and conclusions from all the relevant research.

As with each of the component parts, this overview report does not aim to make firm proposals or recommendations, but rather, to identify and make explicit the advantages and disadvantages, impact and consequences of adopting one option over another.

Social care is the personal care and support required by some people because of needs arising from their age, illness, disability or other circumstances. Support is provided in residential and nursing homes, people’s own homes and in other community settings. See our interim report, Approaches to Social Care Funding, for more information. [Wenzel L, Bennett L, Bottery S, Murray R, Sahib B. Approaches to social care funding. London: The Health Foundation and The King’s Fund; 2018. Available from: (accessed 9 May 2018).]

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