Prime Minister Andy Burnham aims to overhaul England’s underfunded social care system for older adults and disabled residents. BBC Verify outlines four reform options—including cost caps, means test adjustments, and free personal care—though past efforts have repeatedly stalled over funding disagreements during the last 16 years.
The Longstanding Funding Crisis in England’s Care System
England’s social care system provides essential support for older people and working-age adults with disabilities. This system is primarily run by companies rather than directly by the state, and it is widely viewed as underfunded and unfair. Age UK estimates that two million older people across England currently live with some unmet need for social care.
Funding rules vary dramatically depending on the setting. For care received in an individual’s own home, the financial support is means-tested based strictly on income and savings, excluding the value of the home. However, residential care is treated differently; the value of a person’s home generally factors into the means test, meaning those with assets exceeding £23,250 are normally expected to pay the full cost of their care out of pocket. Over the past 16 years, multiple government reform attempts have collapsed entirely due to political arguments over how to pay for them.
Capping Lifetime Expenses and the Dilnot Commission Proposals
One prominent approach to reforming the sector focuses on limiting catastrophic end-of-life expenses. Around one in seven people aged 65 and over face lifetime care costs exceeding £100,000. Under a lifetime cost cap model, the government would pick up the bill once an individual’s spending crosses a certain cash threshold.
In 2011, a commission led by economist Andrew Dilnot proposed a lifetime cap of £35,000, estimating the reforms would cost between £1.3bn and £2.2bn a year at the time. While the Conservative-Liberal Democrat coalition government under David Cameron initially accepted these recommendations, the implementation was later delayed to 2020 following the 2015 general election due to pressures on public finances. Later in 2017, under Theresa May, a Conservative manifesto proposed factoring an individual’s home value into home-care means tests without an initial lifetime cap—a proposal critics swiftly labeled a dementia tax
before it was ultimately dropped.
Revising the Means Test Threshold and Funding Levies
A second reform option involves raising the asset threshold required to qualify for local authority financial support in residential care homes. Currently set at £23,250, supporters argue that raising this limit would allow many more people to access state assistance.
In 2021, Boris Johnson’s Conservative government planned to raise the means test threshold to £100,000. The annual cost of Johnson’s package would have reached £1.8bn a year over three years, with costs projected to climb over time as more residents qualified. To finance this, the Johnson government devised a new Health and Social Care levy, though subsequent Conservative prime ministers ultimately scrapped the levy in an effort to keep taxes down.
Adopting Free Personal Care Models Inspired by Scotland
Moving away from means testing entirely, a third path guarantees state-funded personal care that is free at the point of use for everyone eligible by need, regardless of their personal wealth or whether they live at home or in a residential facility. Scotland has already implemented a similar system.
This model specifically covers personal care tasks such as helping frail elderly individuals wash, dress, and use the toilet. It deliberately excludes accommodation, food, and everyday living expenses—commonly known as hotel costs
—which remain subject to means testing in Scottish care homes. The Health Foundation think tank estimates that adopting a Scottish-style framework in England would cost £7.5bn a year by 2036. International examples like Japan and Germany utilize mandatory long-term care insurance funded by worker and employer contributions, though individuals remain responsible for a portion of their expenses.
Proposals for a National Care Service in England
Beyond adjusting funding thresholds or capping out-of-pocket expenses, some policymakers have advocated for establishing a national care service in England modeled after the ambition of the National Health Service (NHS). As Prime Minister Andy Burnham looks to secure substantial structural changes before leaving office, the ongoing debate leaves open a central unresolved question: how future administrations will finally finance a comprehensive overhaul of a system currently leaving two million older people with unmet needs.
