Approaches to social care funding

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It is widely accepted that the system for funding social care is in urgent need of reform. Faced with shrinking budgets, local authorities are struggling to meet the growing demand for care, linked to increasing complexity in need and an ageing population. As a result, the number of older people receiving publicly funded social care has declined. While in practice, much of this shortfall has been met by private spending and informal care; it is also likely that many people’s care needs are going unmet.

There is little sign of a long-term solution on the horizon. For those who have watched the progress of the social care system over the years, this is a familiar disappointment. Since 1998, there have been 12 green papers, white papers and other consultations, as well as five independent commissions, all attempting to grapple with the problem of securing a sustainable social care system. It has been called ‘one of the greatest unresolved public policy issues of our time’.

Against this background, the Health Foundation and The King’s Fund are undertaking work exploring options for the future funding of social care. This paper considers the following approaches to funding social care for older people in England:

  • Improving the current system
  • The Conservative Party’s proposals at the time of the 2017 general election (a revised means test and a cap on care costs)
  • A single budget for health and social care
  • Free personal care
  • A hypothecated tax for social care

These models were chosen to reflect the solutions most commonly raised in the debate around social care funding, and are not a comprehensive list of possible models. We undertook a review of relevant literature and engaged with two stakeholder groups to develop a framework for exploring these options, and to identify the key strengths and weakness of each. Our objective is not to put forward a single recommendation, but to set out the implications of each of the models.

Key findings

  • There is scope for making small improvements within the current system, and this approach would recognise the great difficulty successive governments have faced in achieving major reform. However, it would not address many of the fundamental problems with the current system, including the downward trend in the numbers receiving publicly funded care. Nor would it protect people against ‘catastrophic’ care costs.
  • The Conservative Party’s proposals would have, for some, resulted in a more generous system than the one currently in place. However, there are real concerns around implementing and operating such a complex system. There is also a question as to whether this would be the best use of additional funding for social care.
  • Whilst a joint health and social care budget might support progress towards more integrated care, it will not in itself address the differences in eligibility between the two systems, or generate additional revenue for health or care.
  • Free personal care would mean increasing the government’s ‘offer’ on social care. However, given this would require an increase in public spending, there is a question as to whether this would be the best use of additional funding for social care.
  • A hypothecated tax may help gain public support for raising additional funding for social care. However, this would represent a significant shift from the existing system, and could exacerbate the lack of alignment between the health and social care.

Read more in the full report >

Related content


Roger Steer

Comment date
15 February 2018

Why not ask how other countries manage the issue?
Is it not relevant to ask why other countries fund healthcare and social care differently and more adequately?
Other countries impose more burdens on the family, why is it in England that families can dump their aged relatives whereas in Europe they cannot? (reversing the intergenerational transfer of assets)
Why not consider an output based commercial contract providing incentives to providers to fashion a "solution" i.e. encouraging nature to take its course ....?(I'm joking)

pamela ellis

Comment date
15 February 2018

Why is it and family care for their loved elderly, the Government and local Council could not care less and family get no support. My mother lived 250 miles away and looking after her was extremely expensive and difficult. Mum went into hospital only for intermittent chest pain and harsh cough. Only for this to be ignored together with and the hospital, in secret, invent their own reason. I believe deliberate losing of mum's precious teeth so she could not eat properly. Mum dead in 3 days. I know nothing of mum's last hours. The York Trust refuse to tell me, despite my pleading with the Chief Executive. The Coroner was not given the truth by the hospital. I found from Freedom of Information, the lengths they went to to coverup and stlll I have not got the truth, now nearly 6 years of desperately trying for it. They could not care about mun when alive, nor in death. Pamela Ellis

Eric Leach

Deputy Chair,
Ealing Save Our NHS
Comment date
16 February 2018

Quite simply more money needs to be allocated every year to social care. Other countries seemingly can afford social care free at the point of use - so why can't the 6th richest country in the world afford this? If the goal of the successful integration of healthcare services and social care services is ever to be realised, these services must be managed and delivered through a single business model. A National Care Service suggests itself in which care homes/nursing homes and domiciliary care agencies are brought back into public ownership. Dropping the commissioner/service supplier arrangements for all forms of care will save us many £100millions each year.


Comms Assistant,
The King's Fund
Comment date
16 February 2018

Hello Pam, I'm sorry to hear about your mother's poor experience of care and the circumstances leading up to her death. Unfortunately we're not best place to provide support on this but we would suggest that you speak to the Patients Association who specialise in patient advice. We hope that they're able to help you.

mary dejevsky

Comment date
18 February 2018

this is one of the clearest and best-written reports on this, or any NHS-related, subject I have read for a very long time. it is entirely comprehensible to a non-specialist and jargon-free - unlike almost every other recent report that seems couched in the secret code of existing interest groups. well done whoever wrote and edited it.

Alison Weaver

Comment date
26 February 2018

I'm puzzled by the report's assertion that those with assets below £14,250 aren't required to contribute to their care costs; this is true of care at home but not of care in homes, where all the resident's income less a small amount of 'spending money' goes towards the fees. This can have a serious effect on any dependants, of course, which shouldn't be ignored.

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