PRAGMA

Problem Register - #3 · Social Care & Welfare

Adult social care

Priority Score

28/35
  • Scale4/5
  • Severity5/5
  • Cost of inaction5/5
  • Tractability4/5
  • Deliverability3/5
  • Cross-partisan viability3/5
  • Time-criticality4/5

Seven dimensions, each scored 1-5 and summed to a total out of 35. It is a triage and communication tool to compare problems - not a measure of truth. How it is derived is set out in The Method.

missing market(Missing or incomplete markets)Distributional failureCoordination failure

The problem

The system for funding and organising care for older and disabled adults is not equal to the demand placed on it. Hundreds of thousands of people wait for assessment or care; the workforce is underpaid and unstable; providers are financially fragile; and families face unpredictable, sometimes catastrophic costs. Reform has been promised and abandoned for a quarter of a century.

The evidence

Around 418,000 people were waiting for care, an assessment or a review in early 2024 (ADASS, a self-reported snapshot), and roughly 2 million older people - about one in five of those aged 65 and over - have some unmet need. The care workforce of ~1.6 million has a vacancy rate of around 7% and turnover of 23%, held down only by overseas recruitment - the route for which was closed in July 2025 with no domestic replacement - while median care pay sits below the incoming National Living Wage and about 31p an hour below a new NHS healthcare assistant. Providers are fragile: the share of councils paying home-care rates below the cost of employing staff rose from 8% in 2023 to 29% in 2025, there is an estimated £1.98bn gap between what councils pay for home care and what it costs (Homecare Association, 2025), and people who fund their own care are charged around 41% more than councils pay for the same service. The Health Foundation estimates that simply standing still costs around £3.4bn a year above the current trajectory, rising to about £6.4bn to meet demand and improve access, and about £8.7bn - heading toward £15.4bn by the mid-2030s - if care-worker pay is also lifted to NHS levels. The means-test thresholds have been frozen since 2010/11, and the £86,000 lifetime cap on care costs - legislated, and due to take effect in October 2025 - was cancelled in July 2024 alongside the £1.36bn fair-cost-of-care fund.

Why the market fails

A missing market: private insurance against future care needs has never developed at scale in the UK, because the risk is hard to price, the need may be decades away, and the costs can be open-ended. A distributional failure: without collective provision, the burden falls catastrophically and arbitrarily on whoever happens to need care. And a coordination failure with the NHS, where underfunded social care directly raises hospital costs through delayed discharges.

Why it has persisted

A Royal Commission (1999), the Dilnot Commission (2011), multiple green papers, and a cap legislated twice and implemented never. The costs are large and immediate, the beneficiaries diffuse, and the politics - the "death tax" and "dementia tax" attacks - have punished every party that has tried. The current vehicle, the independent Casey Commission, is not due to report on long-term funding until 2028: itself a further deferral.

Who bears the cost

Older and disabled people who go without adequate care; unpaid family carers, overwhelmingly women, who fill the gap; care workers on poverty wages; and the NHS.

Policy direction - outline only

Proposed mechanism

On delivery, an evidence-led package - a properly funded pay settlement plus a funded career structure, job-quality reform and a domestic recruit-and-train route (the bare pay floor alone does not fix the shortage; pay retains workers but does not recruit them); true-cost provider funding with the self-funder cross-subsidy ended by commencing Care Act s.18(3), plus a resolution regime for failing providers; coordination and capacity at the NHS interface, sold honestly with no banked savings; and prevention, reablement and clearing the waits - all under a hard rule of capacity before entitlement (build the staff and providers before widening any right to care, the lesson of Scotland's free personal care). On funding, a neutral, costed menu - social insurance, hypothecated National Insurance, free personal care, an un-diluted lifetime cap, means-test reform, or status-quo-plus, with private insurance only ever a top-up - with the value question (who bears the uninsurable catastrophic tail, and how progressively across income, wealth and generations) put openly to the public rather than prescribed. The 2021 diluted cap is named as the cardinal error - a distributional choice dressed as a technical safeguard - and Pragma recommends no option.

Must resolve

The funding choice itself, which is the public's to make; the transition for people already in care; and the channel through which the public choice is taken.

Main risks

The intergenerational and distributional fairness disputes that have killed every predecessor (mitigated by routing the value choice to the public, not prescribing it); a provider-market response to ending the cross-subsidy (mitigated by funding councils to true cost first); and widening entitlement faster than capacity can honour it (mitigated by the capacity-before-entitlement gate).

Sources

  1. Skills for Care, State of the Adult Social Care Sector and Workforce in England 2025
  2. Health Foundation funding scenarios
  3. Homecare Association, homecare funding gap 2025
  4. CMA care-homes market study, via Commons Library CBP-8003
  5. Audit Scotland, Delayed discharges 2026
  6. Casey Commission terms of reference
  7. the adult social care worked-product set published with this entry

Worked policy product

Adult social care

Worked product · developed to Method standard