On an average day, around one in ten hospital beds in England are occupied by someone medically fit to leave, but unable to do so because the care they need at home is not available. At an estimated cost of £562 per hospital bed per day, this costs £2.7 billion a year.
Pressure is also building at the front door of hospitals: ambulance queues, ever-longer waits in accident and emergency departments, and patients treated on trolleys in corridors. One reason is that an estimated 3.5 million people in England are not receiving adequate care at home. Without it, they are more likely to fall, become malnourished or dehydrated, develop infections or pressure sores, and ultimately require hospital admission.
This is both inhumane and inefficient. The Independent Commission on Adult Social Care, led by Baroness Louise Casey, describes social care as a system of “cobbled together, underfunded services relying on low-paid care workers, a lack of ownership and accountability, and a deep divide between health and social care”.
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Still no plan
Why, when every government since 1997 has commissioned an inquiry into how to fund adult social care, is there still no plan?
The first reason is cost to the Treasury. In 1999, a Royal Commission recommended personal care should be funded, like health, through general taxation, but Tony Blair’s New Labour government rejected this outright. The Dilnot inquiry recommended a cap on care costs in 2011. Although legislated for in 2014, successive governments delayed implementation before it was eventually shelved. Boris Johnson revived the idea in 2021 alongside a health and social care levy; Liz Truss abolished the levy in 2022, and Labour cancelled the cap in 2024.
The second reason is the political sensitivity of personal wealth in the UK, especially wealth held in property. Neither main party has been successful in persuading voters that accumulated housing wealth should pay for care in later life. Labour’s proposed National Care Service was attacked as a “death tax” in 2010, while Conservative plans to include homes in the means test for domiciliary care were sunk as a “dementia tax” in 2017.
Why is care funding in the UK stuck in a tug of war between the taxpayer and the homeowner? Introducing “right to buy” in 1980, Margaret Thatcher’s government told voters that home ownership would enable “parents to accrue wealth for their children”, and foster “the attitudes of independence and self-reliance that are the bedrock of a free society”. But over the 1980s, the social security bill for private care home places spiralled, increasing the burden on taxpayers.
In 1990, the government’s response was the NHS and Community Care Act, which handed money to councils as a fixed budget and made a means test – which counted the value of property – the gateway to funding. The government had simultaneously promoted property as a private safety net and made it a vulnerable asset.
Prime Minister Andy Burnham has made care reform a priority, asking Casey to bring forward the commission’s recommendations to 2027. But the Treasury has given no sign that additional cash will be made available through taxation or borrowing, and a fragile new Labour government is polling neck and neck with two rightwing opposition parties both hostile to expansion of the state. It is hard to see how Burnham’s attempt will end differently from what Casey herself has called a cycle of “crisis, promises of reform, another review, and then retreat”.
A way out
But examples from four countries might reveal a way out of this cycle.
In Japan in the 1990s, growing numbers of older people were remaining in hospital as women increasingly entered the paid workforce and fewer families could provide unpaid care. In 2000, it introduced compulsory long-term care insurance, shifting responsibility from families to society as a whole. Providers are paid according to a national fee schedule, preventing municipalities from driving down prices.
Sweden faced its own crisis of older people stuck in hospital beds in the 1980s. Separate health and social care budgets encouraged cost-shifting between hospitals and municipalities. The 1992 Ädel reforms made municipalities financially responsible for patients medically fit for discharge, after which delayed discharges fell sharply.
In Germany, by the early 1990s, more people needing long-term care were exhausting their savings and relying on means-tested welfare, which was increasingly seen as unjust. In 1995, a cross-party agreement introduced compulsory long-term care insurance, paid for by payroll contributions shared between workers and employers.
Denmark tackled the other end of the problem. From 1987, the country stopped building traditional nursing homes and instead developed self-contained housing alongside tax-funded support at home. National preventive home visits were added in 1996.
What links the examples above is an acknowledgement yet to be made in the UK that the need for care, like health, is a shared social risk, to be pooled by everyone rather than a lottery of private misfortune. Reform in each of these countries happened when the consequences of neglecting it became too politically costly: blocked wards, buckling local budgets, a huge unpaid informal workforce, an angry property-owning class wanting to protect accumulated wealth. England now has all four at once.
So what would a way out look like? Four lessons emerge from the examples above. First, money is not the whole story: the UK spends around 2.6% of GDP on long-term care, more than Japan and Germany (2.4% and 2.5%), but less than Denmark and Sweden (3.2% and 3.7%). The second is that as long as health and social care hold separate budgets, their incentives will not align, and may even be in tension. The third, from Denmark, is that investment in care at home reduces the need for hospital care later.
The fourth is one without which none of the others works: a decision about who bears the risk. Japan and Germany pool it through compulsory insurance-based contributions, Sweden and Denmark through taxation – but all four decided, and stuck to it across changes of government. Britain, as Casey puts it, has never made the decision about “what [social care] was for, what people should expect or who should pay, and how”. That is the decision now sitting on Burnham’s desk.
Joseph Freer receives salary funding from Queen Mary University of London and has previously been funded by the National Institute for Health and Care Research.
