Adult social care funding and eligibility: our position

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Part of The King's Fund position

The social care system is failing the people who rely on it and urgently needs reform.

What we think

The social care system is not fit for purpose and is failing the people who rely on it, with high levels of unmet need and providers struggling to deliver the quality of care that older and disabled people have a right to expect. These combine to place great pressures on families and carers.

By 2066, the ONS estimates that there will be a further 8.6m UK residents aged 65 years and over.
Source: Office for National Statistics

Politicians must be honest with the public about the shortcomings of the current system and the costs of reform. Our research shows that people have very little understanding of how social care operates and even less understanding of how it is funded. When given more detailed information about how social care works, they overwhelmingly agree that reform is needed.

Short-term funding pressures must be addressed urgently to prevent further deterioration, while a simpler and fairer social care system should be phased in over time. Reducing the historic divide between means-tested social care and largely free-at-the-point-of-use NHS services would also provide benefits. There are different ways to achieve this. One option would be to provide free personal care as in Scotland, which would widen access to free services but would cost many billions. However, simply maintaining our current, failing system by doing nothing would also be costly. When the choices are made clear to the public, most believe that the bulk of new funding to pay for the reformed system should come from central government.

The total number of adults receiving publicly funded care fell by around 400,000 between 2009/10 and 2013/14 and has continued to fall since then.

The context

Unlike most of the NHS, publicly funded adult social care is not free at the point of use. Instead access is restricted to those with the highest needs and lowest assets. Complicated rules to determine eligibility for publicly funded services create a complex system that is difficult to understand. Social care also differs from the NHS in that it is run by local authorities, who typically commission private sector companies or voluntary sector organisations to provide services.

Spending by local authorities on adult social care was £700 million lower in real terms in 2017/18 compared to 2010/11
Source: Social care 360, The King's Fund

The social care system has long been under-resourced as local authority budgets have failed to keep pace with the demographic pressures of rising numbers of older and disabled people with complex care needs. Between 2010/11 and 2014/15, significant reductions in local authority funding led to cuts to social care budgets. While budgets have risen again over the past few years, funding in 2017/18 remained well below 2010/11 levels. This has left the system on the edge of crisis.

Underfunding has forced local authorities to restrict eligibility to those with the most substantial care needs only, while nationally means test thresholds have not been increased in line with inflation. As a result, while more older people are approaching councils for support, fewer are now receiving it, although there has been a small increase in the number of working-age adults getting long-term help. Those who are not eligible have no protection against the very high costs associated with long stays in residential care. Around 1 in 10 people aged 65 people face care costs of £100,000 or more.

Around 1 in 10 people aged 65+ face care costs of £100,000 or more.
Source: Commission on Funding Care and Support

Many councils also pay providers less than they need to deliver quality care, leading some to hand back contracts or go out of business, threatening the supply of publicly funded care to the people who need it. This also results in a system that relies on cross subsidy between care-home residents paying for themselves and those who are funded by their local authority. This cross subsidy can be significant: on average, a self-funder's place costs around 40 per cent more than one paid for by the local authority.

Together, these issues mean that many older and disabled people who need help with basic tasks such as washing, eating and getting dressed are forced to rely on family, pay for care themselves – or are unable to access care at all. Although the primary impact is on service users and their families, this has knock-on effects on the NHS and other services.

There are various estimates of unmet needs among older people, with analysis from Age UK putting the figure at 1.4 million.
Source: Age UK

In the past 20 years there have been numerous failed attempts to find a way forward, including 12 White Papers, Green Papers and other consultations about social care in England as well as five independent reviews and commissions. Successive governments have put off fundamental reform of the system, opting instead for short-term measures. The previous government promised to publish a Green Paper setting out options for reform but this has been repeatedly delayed and it remains to be seen whether the current government continues to be committed to reform.

By comparison, some other countries have managed to successfully implement funding reform. For example, Japan and Germany have introduced compulsory insurance for social care to complement their systems of health insurance.

Key spokespeople on social care

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Simon Bottery

Senior Fellow, social care

Sally Warren

Director of Policy