Political focus on reducing benefit spending, and debate about deserving and undeserving claimants, have weakened the social insurance principle that costs should be shared across society to protect vulnerable people. Population ageing and lower fertility mean that care costs will increasingly be supported by fewer workers. This has made collective funding harder to justify politically.
Burnham has committed to a National Care Service built on the NHS principle of collective contribution and brought the Casey review forward. He also ruled out raising income tax, employee NICs, or VAT. His acknowledgement that reform requires difficult funding decisions is significant, but the routes he has excluded are among the main means of pooling risk across society.
Previous reforms have stalled because each proposal required more public spending or higher individual contributions than governments thought acceptable. Dilnot’s 2011 commission estimated that a £35,000 cap on individual contributions would cost an additional £3.6bn pa by 2025/26. The Barker Commission’s 2014 settlement required around £5bn pa. The Care Act 2014 legislated for a cap on care costs of £86,000 but was repeatedly delayed and abandoned in July 2024.
Given the scale of the cost, funding social care requires pooling risk across society. The Johnson government moved in this direction by raising NICs to fund health and social care, but the Truss government reversed the increase. Private pensions cannot be the main source of care funding because this would leave people with even lower retirement incomes than they are already on course for. Burnham has endorsed collective contribution while excluding the broadest instruments for delivering it, which is the tension any funding settlement now has to resolve.
Leave a Reply