The United Kingdom is poised for significant changes to its social care system following proposals aimed at reducing private sector involvement in the delivery of nursing home services. The government is considering a shift towards a national care service modeled on the National Health Service (NHS), with a focus on community-led care provided by charities, local authorities, and not-for-profit organizations.

Andy Burnham, the prime minister, is expected to announce an intensified commitment to social care reform, emphasizing the need to protect taxpayers’ money from subsidizing profits generated by private equity firms. The plan seeks to provide elderly individuals with free nursing care at the point of need, eliminating the often catastrophic fees currently faced by many, which average around £80,000 per person annually.

According to sources familiar with the proposal, there is reluctance within the government to allow the new social care service to operate on a for-profit basis through large private providers. Instead, officials are exploring models more akin to Burnham’s “Live Well” initiative in Manchester, promoting integration and locally managed care. One possible approach under consideration is to exclude profit-driven private care homes from the new funding arrangements altogether.

The move reflects broader trends seen in parts of the UK, as Wales has recently passed legislation banning private profit in children’s social care placements from 2030. Such a measure aims to ensure public funds are directed primarily towards care quality rather than shareholder returns.

Currently, the UK has about 18,000 care homes, with approximately 85 percent operated by for-profit entities, according to research by the University of Oxford. Studies indicate these privately run facilities often provide lower-quality care compared to those operated by councils or charities. Public authorities spend some £34.5 billion annually on social care, though experts warn that significant portions of this funding are diverted to investor profits rather than improving services.

The government has yet to detail the financial framework to support these reforms, but estimates suggest annual costs could reach £18.5 billion. This comes amid broader fiscal pressures, with a recent report by the National Institute of Economic and Social Research highlighting a £24 billion budget shortfall exacerbated by inflationary pressures through the decade.

The growing presence of private equity in the sector has raised additional concerns. Major care providers like HC-One and Care UK are owned by investment firms based internationally, drawing scrutiny regarding the motivations behind care delivery. A report last year estimated that private care operators in certain English regions extracted around £250 million in profits over three years.

Experts warn that a swift exclusion of private for-profit providers could destabilize the sector and jeopardize continuity of care. Camille Oung of the Nuffield Trust cautioned that sudden market exits by providers could negatively impact those receiving care. Similarly, Nadra Ahmed, co-chair of the National Care Association, noted that many care homes are operated by small businesses and charities, often subsidizing their services through other revenue streams, and urged careful consideration to avoid pushing out established, quality providers.

Political opposition groups have also voiced concerns over funding mechanisms. Reform UK has criticized proposals for a so-called “death tax” to finance social care, claiming it could impose substantial costs on individuals, including residents in Burnham’s own constituency.

As the government prepares to finalize its approach, it awaits the results of Baroness Casey of Blackstock’s comprehensive review into social care, with any major policy shifts likely to be implemented gradually to minimize disruption to current care arrangements.