The social care system in England is on life support. A confluence of rising demand, chronic underfunding, and a shrinking workforce has created a crisis that leaves hundreds of thousands of elderly and disabled people without adequate support. The question that has bedeviled successive governments is how to construct a funding model that is both fair and sustainable. This report examines the current state of social care and the political and financial contours of the search for a solution.

Demand for care is soaring. By 2040, the number of people aged 85 and over is projected to nearly double. Yet the number of filled posts in adult social care has fallen by 50,000 since 2021. Providers report that they cannot recruit or retain staff at current wage levels. Many care homes have closed, and home care visits are being cut. The result is a system where access depends less on need and more on wealth and geography. The Care Quality Commission rated 20% of services as inadequate or requiring improvement last year.

The funding gap is stark. In 2023, total public spending on adult social care in England was around £24 billion. But the Health Foundation estimates that an additional £8 billion per year is needed to meet growing demand and improve quality. For comparison, the NHS budget is over £180 billion. Social care, as one former minister put it, is the poor relation.

A fundamental problem is that social care is not free at the point of use, unlike the NHS. Means-testing means that those with assets over £23,250 must pay for their own care. This forces many to sell their homes. The system creates perverse incentives: people with modest savings often impoverish themselves to qualify for state support. The Dilnot Commission in 2011 proposed a cap on lifetime care costs and a higher asset threshold. A cap of £86,000 was legislated but repeatedly delayed. In 2023, the government announced a two-year postponement until October 2025.

A sustainable solution requires a broad consensus on three issues: the total amount of funding, the balance between state and individual contributions, and the method of raising additional revenue. On the first, there is wide agreement that more money is needed. However, the second and third generate fierce debate. The government has favored a model where individuals bear more risk. In 2021, it introduced a 1.25% health and social care levy on National Insurance contributions, but this was reversed by the current administration. The replacement plan, announced in 2022, funds care through general taxation and a new levy on property? No. That was dropped. Instead, the government has kicked the can down the road, with a promise of a long-term reform white paper.

A tax on property has been suggested by several think tanks. The idea is that a small percentage levy on land values or on estates could generate billions while targeting wealth that is often tied up in housing. Others advocate for a single, merged health and social care budget, as recommended by the Barker Commission in 2014. This would reduce perverse incentives but would require a massive restructuring of NHS finances. A social insurance model, like that used in Germany and Japan, is another option. Under that system, workers and employers contribute a fixed percentage of wages into a dedicated fund. This provides a stable, ring-fenced revenue stream. But it would be a new tax on earnings, which is politically toxic.

The clock is ticking. With an election looming, no major party has put forward a detailed, costed plan. The Labour Party has pledged to create a National Care Service and fund it by ending the tax breaks enjoyed by private schools? No, that does not add up. The Liberal Democrats advocate a 1% income tax rise for social care. The Conservatives promise a white paper. The public, meanwhile, remains anxious. A 2023 poll found that 70% of adults are worried about the cost of care for themselves or their families.

Ultimately, a sustainable solution requires honesty. The country must decide whether it is willing to pay more, through higher taxes, or accept a system where only the wealthy receive decent care. There are no easy answers. But the current policy of delay and short-term fixes is unsustainable. The hunt for a solution must end not with a white paper, but with a cross-party agreement that ensures dignity in old age is not a luxury for the few.