The incoming leader of the United Kingdom faces a complex array of challenges, prominently including the reform of the social care system, which is widely perceived as underfunded and inequitable.
Social Care Reform
The social care system in England, largely managed by independent providers rather than the National Health Service, is a significant concern. Public funding for care is means-tested, and an estimated two million older people in England currently live with unmet social care needs. For those aged 65 and over, lifetime care costs can exceed £100,000. Andy Burnham has characterized the system as "broken." He previously attempted to reform it as health secretary under Gordon Brown, but the plans were abandoned after the Labour party lost the 2010 election. A 2011 government report by economist Andrew Dilnot proposed a state-funded cap on lifetime care costs at approximately £35,000. While the principle of a cap was accepted by Conservative ministers, the Dilnot system was never implemented.
Later, former Prime Minister Theresa May's 2017 Conservative manifesto proposed a new social care support system that included the value of a person's home in the means test for home-based care, without an initial cap on lifetime contributions. This plan generated controversy, as homeowners could have faced higher care costs based on their property value, and the proposal was attributed to the loss of the Conservative majority in that election.
Labour's 2024 manifesto included a pledge for a new "national care service." However, the current Prime Minister delayed reform by commissioning a review from Baroness Louise Casey, with a final report due by 2028. Burnham has indicated a desire for this review to be completed sooner, potentially by the end of 2026, and he may implement its recommendations.
Any significant reform is expected to cost billions of pounds annually. Burnham has previously suggested using inheritance tax to fund social care reform, proposing a 10% levy on estates. However, polling indicates that inheritance tax is often viewed as unfair. More recently, he has expressed openness to abolishing inheritance tax and instead taxing wealthier individuals during their lifetime.
Defense Spending and Housing
Beyond social care, the incoming leader must also contend with decisions on defense spending and housing policy. The precise approach to defense commitments and the strategies for addressing the housing crisis remain key areas requiring attention. Discussions around defense budgets often involve balancing national security needs with economic considerations. Similarly, housing policy is a persistent challenge, with ongoing debates about affordability, supply, and accessibility.