Labour must tackle social care crisis head-on, experts urge

If a new Labour leader wants to underline their determination to wrestle with Britain’s political challenges, it is hard to think of a better place to start than with the creaking social care settlement, according to a collection of essays published this week by the Fabian Society.

The essays urge the government, regardless of who leads it, to press ahead with creating a “national care service” more closely aligned with the National Health Service and ensure it is properly funded.

Nine years ago Monday, in a cavernous former mill in Halifax, former Prime Minister Theresa May launched the Conservatives’ general election manifesto. At its heart, aside from philosophical blather, was a plan to fund care costs.

The Conservatives promised that no one would have to sell their home in their lifetime to pay for care, with costs deferred until after death. The first £100,000 of a patient’s assets would be protected, but beyond that they would be liable.

Before the day was out, Labour had called the plan a “dementia tax,” arguing it could result in part of the value of a patient’s home being used to fund their care after death.

The policy, and May’s clunking retreat, was widely credited as a contributing factor in the Conservatives’ worse-than-expected 2017 general election performance, ultimately costing May her premiership.

Scroll back another seven years, and a plan to levy a charge on estates to pay for universal social care, drawn up by then-Labour Health Secretary Andy Burnham, was called a “death tax” by the Conservatives, with the policy dying as Gordon Brown was swept from power in the 2010 general election.

It is not hard to understand why politicians have subsequently ducked the issue: the trade-offs are tough, and voters do not want to be told they will have to pay for a system they may never need.

Boris Johnson did announce a “health and social care levy” on national insurance intended to cap families’ care costs at £86,000, but Liz Truss, with her allergy to tax increases, scrapped it. When Labour came to power two years later, Chancellor Rachel Reeves increased the social care budget but indefinitely shelved the idea of a cap on fees as too expensive.

Labour has not been idle: radical plans for a statutory negotiating body for care workers’ pay are progressing, with more details expected next month about who will sit around the table.

But the broader question of how the nation collectively addresses the challenges of caring for an ageing society has been ducked.

That leaves families still selling their homes to fund care and fretting about how long the proceeds will last as they witness a relative’s heartbreaking decline. Meanwhile, the cash-strapped care sector still struggles to meet growing need.

The sorry history of politicians failing to grip the issue is partly indicative of the fiscal constraints they are increasingly forced to work with.

But it also seems to mark a kind of learned helplessness, an unwillingness to make an argument — the characteristic identified as Keir Starmer’s worst failing in Jess Phillips’s resignation letter last week.

Almost two years on from the 2024 general election, even the Fabians, wedded to gradualism, are warning the government not to waste any more time.

Ben Cooper, co-author of the Fabian collection, warns Labour against holding out for the cross-party consensus it claims to hope to foment as part of a review of social care by Louise Casey.

“While cross-party consensus is important, building the foundations of the national care service cannot wait,” he says. “The second half of this parliament must be about delivering affordable, high quality and personalised care with better conditions for the workforce. Otherwise, voters will remain frustrated with the slow pace of change – and unwilling to trust the government with another opportunity to fix social care.”

In her contribution, Labour MP Anna Dixon agrees: “The goal of the Casey Commission was to build a strong cross-party consensus around a long-term vision for care. But, ever since the review began, concerns have grown over the pace and urgency of change.”

Burnham, if he does replace Starmer, or indeed Angela Rayner, would be acutely aware of the need to fund any uplift in care spending. The fear stalking the bond markets — that a Burnham or Rayner premiership would mean a wild splurge unmatched by tax increases — is wide of the mark.

Burnham has talked in recent years about replacing inheritance tax with a progressive “care levy” in order to fund a national care service.

That would mesh with the idea floated by former Transport Secretary Louise Haigh in the journal Renewal last week: that social care funding should be centralised instead of falling so heavily on local authorities, which are then punished by voters for cutting back on other community services.

Mathew Lawrence of the thinktank Common Wealth, associated with the Burnham-adjacent group Mainstream, has called for more public sector involvement in the sector, arguing that in today’s economy “care is degraded by financial extraction at the point of delivery”.

Casey’s final verdict is not due until 2028. Yet, as Cooper at the Fabian Society says, giving a clear direction of travel now would “show what Labour stands for”.

It will be unforgivable by the time of the next general election, as May robotically put it back in 2017, if “nothing has changed”.