Burnham bets on social care: implications for operators and investors

Flint Global perspective on Burnham's National Care Service announcements

Prime ministers do not usually spend political capital on social care. It is the issue that has ended careers and sunk manifestos (such as Theresa May in 2017) over two decades.  The standard move has been to commission a review (e.g. the 2011 Dilnot review) and wait for the electoral cycle to move on. Andy Burnham has done the opposite.

Last week he pledged to put "everything he's got" behind building a National Care Service alongside the NHS, said he "would never forgive myself if I left without having tried", tying the cause directly to his father's experience of Alzheimer's disease. That is the language of a Prime Minister who chose, in his first week as PM, to make clear his intent to own the problem rather than defer it.

For investors and operators, the rhetoric indicates a clearer scrutiny of profit, ownership and leverage of for-profit providers, but key questions remain as to what would be fiscally and operationally viable, and how much the Burnham government will pursue a more interventionist approach following the report of the independent Casey Commission next year. Longer term, it remains to be seen how much a possible right of centre government (post a 2029 election) would be willing or able to do in terms of changing Burnham’s legacy in this area.

The biggest priority for providers, investors and other stakeholders right now is to engage Casey's expedited review – her "Big Conversation" is the formal channel to shape the future funding model and provider framework before they are designed. Once Casey delivers her recommendations it is highly likely a future Burnham government would seek to deliver most of them in full.

What was actually announced

While the rhetoric justifiably fuelled a lot of speculation as to what Burnham’s remarks might mean in practice, they contained a relatively limited number of concrete steps.

First, Baroness Casey has been asked to accelerate her Commission and report a full plan for the National Care Service by next summer, pulling the timetable forward from 2028. Alongside, Health Secretary Yvette Cooper will chair a new ministerial group to drive reform.

Second, building on the incoming Fair Pay Agreement, Burnham wants to treat social care and the NHS as "one workforce" with better pay, training, job security and progression routes for care workers, effectively driving greater parity with the NHS.

Third, cross-party talks began immediately, with the Conservatives and Liberal Democrats invited in but Reform and the Greens left out.

Alongside the official announcements, The Times reported a preference within government for a model built around councils, charities and not-for-profits, with No.10 reluctant to see large private providers earning high returns from taxpayer-funded services. The report said that no decision had been taken and that any change would need to be phased.

Burnham drew parallels to the US, calling social care in England ‘as unfair as American healthcare’. In short, instinctively, Burnham will want to reduce the market share of for-profit homes and chains within the system.

What can we confidently conclude from the announcements?

What Burnham’s remarks might mean in practical policy concerns is hard to derive, but we have sufficient indications from Burnham (and from rhetoric and measures over the last two years regarding the health and care sectors) to be fairly confident that success for Burnham would include:

• A fairer, more financially sustainable system for funding social care
• A more joined up system of provision, integrating traditional social care settings with neighbourhood health centres and various forms of supported living
• Higher quality care, with all operators meeting higher standards
• A more professionalised, better paid workforce which is properly integrated and aligned with the NHS workforce and its pay and conditions
• A reduced role for the for-profit sector over time
• A reduction in ‘profiteering’ by providers

The for-profit sector will be squeezed, but displacement will be limited

If the reporting bears out, the firms most exposed to Burnham’s scrutiny and measures would be large nursing home chains backed by private equity or overseas capital, rather than small family-run operators. However, a wholesale exclusion of for-profit providers is close to operationally impossible as these providers operate roughly 85% of England's care home bed places.

A more plausible outcome is a phased squeeze on "profiteering" (rarely clearly defined) and a build-out of public and non-profit capacity, with much of the independent sector retained inside a tighter national framework. Government would need to establish on what terms, and at what margin, will independent providers be allowed to operate.

The workforce measures will increase costs, which providers may struggle to pass on

The workforce commitment has broader implications as it affects everyone, not just the larger chains. Better pay and greater mobility into NHS roles will lift wage floors across the sector and risk turning career progression into a one-way exit into NHS employment. This compounds a cost base already under real strain.

The Nuffield Trust has been blunt that a Fair Pay Agreement "won't work unless properly funded", noting that National Insurance and National Living Wage changes drove an almost 10% rise in workforce costs in 2025/26.

Layer on guaranteed-hours obligations under the Employment Rights Act and the closure of the overseas care-worker visa route, and this creates a real foundational issue with staffing.

Funding levels and structures present the biggest challenges

Burnham’s commitment to major social care reform will be largely reflected in what he is prepared to do on funding and related taxation (which has doomed previous reform initiatives.)

Local authorities’ gross current expenditure on adult social care reached £29.4 billion in 2024/25. Despite this, the means-test threshold remains frozen at £23,250 and council finances remain precarious. In an LGA survey, 47% of responding councils with social-care responsibilities said they were likely to seek emergency financial support within the following three years.

Into that picture Burnham has recommitted to no rises in income tax, National Insurance or VAT. For now, he is emphasising what can be found inside existing budgets: less profit extraction, fewer delayed discharges, more prevention.

While these constitute real savings, perhaps, but not the near-term revenue reform on this scale demands. That is why the reported interest in a mandatory social-insurance contribution matters (the public services think tank Re:State recently issued a major report in favour of this). It is not government policy, and No. 10 says nothing will be decided before Casey reports, however, it tells you the Treasury is keeping a revenue-raising option alive for later.

Burnham has also in the past floated the idea of abolishing inheritance tax and replacing it with a form of social care levy. The idea that has already drawn a flurry of opposition in some quarters of the press, with echoes of Theresa May’s 2017 policies being branded a ‘dementia tax’.

Nothing this week creates an immediate multibillion-pound entitlement; the settlement on funding and eligibility is unlikely before Casey reports in summer 2027, though workforce measures are likely to move sooner. However, viewed alongside the abolition of NHS England and the neighbourhood, prevention-led thrust of the 10-Year Health Plan, it is clear that this government wants to develop the architecture of a more integrated health-and-care system. 

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