Ben Chu

Prime Minister Andy Burnham has called for major reform of social care in England and asked Louise Casey to report in 2027, while cross-party talks are due to begin. Four possible approaches are examined: capping lifetime care costs, raising the means-test threshold, introducing free personal care, and creating a universal national care service. Estimated costs range from £1.3bn–£2.2bn annually for the original Dilnot-style cap to about £19bn extra per year for a comprehensive national system by 2036. Previous proposals from Conservative, Liberal Democrat and Labour governments were delayed, abandoned or left unfunded, and the options could be combined rather than treated as mutually exclusive.

Andy Burnham's first-week pledges amount to about £1.5bn, or roughly 0.1% of projected UK public spending. The package includes £340m to address rough sleeping in England, an £850m VAT cut on domestic electricity bills, a £2 cap on most English bus fares costing more than £500m, and £100m in business-rates relief for pubs, clubs and live-music venues. The government says the measures are funded through existing budgets, changes to international climate financing and business-relief reviews, but the electricity VAT cut remains effectively unfunded because the cancelled digital ID scheme was not itself funded. No 10 North is also said to involve no additional taxpayer cost. Larger potential commitments on personal tax allowances, defence, council-house building and social care could cost billions annually and would require future tax rises, spending cuts or other difficult choices under the government's fiscal rules.

UK electricity prices remain among the highest in Europe due to gas‑fired power setting wholesale prices, the UK’s heavy reliance on natural gas compared with countries with more nuclear power, and rising grid and generation subsidy costs added to household bills. Investment in renewable infrastructure and modernising the electricity grid has increased network charges, while analysts argue that shifting policy costs from bills to general taxation could reduce disincentives for electrification. The government expects its 2030 clean‑power strategy to lessen exposure to volatile global gas prices, though future gas prices remain uncertain.

UK electricity prices remain high due to wholesale gas setting market rates, the country’s reliance on natural gas compared with nations like France, and rising costs linked to subsidies and major grid infrastructure investment. Wholesale gas prices, exacerbated by conflicts in Iran and Ukraine, continue to influence household bills, while expanding renewable energy and upgrading the grid have added further costs. Analysts note that reducing dependence on gas through clean power policies could eventually lower prices, though outcomes depend heavily on unpredictable future gas prices. Some experts recommend shifting policy costs from bills to general taxation to avoid discouraging electric heating adoption.

Andy Burnham is set to take office facing five major challenges: rising disability and sickness welfare costs, pressure to increase defence spending, long‑delayed social care reform, a severe shortfall in housebuilding, and a surge in young people not in employment, education or training. Each area carries significant financial implications, political risk and historic policy failures, with key reports and proposals pending across welfare, social care and youth training. Burnham signals he will prioritise reform and investment but must balance ambitions with fiscal constraints and party sensitivities.

Working‑age sickness and disability benefits have risen sharply, with Personal Independence Payment claims increasing to 4 million and ADHD‑related claims reaching about 100,000. Rising diagnoses and greater recognition of ADHD contribute to the trend, with young adults making up more than half of such claimants. PIP is now the fastest‑growing element of the welfare budget, projected to help drive total sickness and disability spending to £78bn by 2030. Despite this, overall non‑pensioner welfare spending as a share of GDP has declined since 2010. Analysts highlight the impact of past welfare cuts, and the government signals forthcoming reforms informed by the Timms Review.

UK defence spending is projected to reach 2.7% of GDP by 2027‑28 under the new Defence Investment Plan, short of the trajectory needed to meet the target of 3% in the next parliament and NATO’s 3.5% goal by 2035. The plan adds roughly £600m more for 2030 than earlier drafts and increases total MoD spending by £15bn over four years compared with prior plans. Former defence secretary John Healey and other critics argue the plan lacks a target date for 3% and does not outline a clear path to meeting future NATO commitments, while the government maintains the UK remains on track through future spending reviews.

The Defence Investment Plan outlines projected UK defence spending rising to 2.7% of GDP by 2027–28, a level expected to remain through 2030. This falls short of the government’s longer-term ambitions of reaching 3% of GDP in the next parliament and Nato’s 3.5% target by 2035, despite recent additions of £600m by 2030 and an overall £15bn increase in planned spending over four years. The plan also leaves uncertainty over how the UK will meet its stated commitments, with critics highlighting the lack of a target date for achieving 3% spending and addressing a reported but unconfirmed £28bn defence budget shortfall.

Andy Burnham proposes a radical expansion of UK devolution, shifting power from Whitehall to regions across England, Scotland, Wales and Northern Ireland to drive economic growth. While devolved nations have not significantly closed productivity gaps with the UK average, analysts argue they might have fared worse without devolution and note external factors such as Brexit complicate assessment. Greater Manchester is cited as a relative success, with devolved powers contributing to improved productivity, investment and transport coordination. Economists argue that empowering second-tier cities could help rebalance the UK economy, drawing comparisons with more devolved European countries. However, large-scale regional equalisation could require major state investment, and Burnham’s commitment to existing fiscal rules may limit the scale of funding available for further devolution.

Burnham proposes extensive UK-wide devolution to boost economic growth by shifting power from Whitehall to regional authorities. Economic data indicate limited growth impact from existing devolution in Scotland, Wales and Northern Ireland, though analysts note outcomes might have been weaker without it. Greater Manchester’s relatively strong performance is partially attributed to devolved powers over transport, housing and investment. Economists argue that empowering major UK cities could narrow productivity gaps with London, improving national growth. Significant investment would likely be needed, but Burnham pledges adherence to current fiscal rules, constraining large-scale spending.