In the first decade of the century, long-term care (LTC) policies for dependent older people in Italy were improved with respect to both the availability of public funds and the quality of services. At the turn of the decade, however, cost-containment and austerity measures were imposed as an overall priority for the public sector and this goal also affected the LTC sector. This article explores the effects produced by cost-containment policies, which widened the gap between care needs and available public funding, on the provision of LTC services at the local level in Italy during the economic crisis. The study is based on 34 semi-structured interviews with services managers employed in Italy's publicly funded LTC system. Data were analysed with the framework analysis method and six cross-cutting thematic categories were identified that depict, according to the interviewees, the main transformations that occurred in the provision of LTC at the local level as a consequence of cost-containment policies. ‘Uncertainty’ refers to the inability to predict what direction the LTC system is going to take in the foreseeable future. ‘Short-termism’ illustrates the pressure to focus excessively on day-to-day service delivery at the expense of a medium- to long-term view of their future. ‘Endangering quality’ describes the risk of not being able to maintain the level of quality of care achieved so far. ‘Allocative tensions’ refers to the tensions due to the increasing requirement to ration the provision of public LTC services. ‘Unequal re-familiarisation’ represents the very different impacts of the trend of re-familiarisation depending on families’ financial situation. ‘Inappropriate care’ depicts the rising number of older people receiving public care interventions that are not appropriate to meet their needs.