Burnham’s National Care Service will be a costly mistake using your money

Yet one is left puzzled when he announces schemes whose rationale can hardly be justified, and whose costs have not been fully estimated. Perhaps, if he lacked a clear plan for funding a new policy agenda, he should not have pushed Keir Starmer out of Downing Street.

The National Care Service is the latest such scheme – and it will not work.

Essentially, the Prime Minister wants to make social care work as the NHS does – that is, social care should be provided free at the point of need rather than based on the size of one’s savings. It sounds attractive on the surface but loses all lustre when probed a bit deeper.

For a start, “free” is doing a lot of heavy lifting here. In reality, the care provided would obviously not be free. The money to fund this endeavour would still be coming out of your savings and your children’s future inheritance.

To understand this sentiment further, let us remember the origin of this idea. Back in 2010, the then-Secretary of State for Health, Andy Burnham, floated the idea of a National Care Service (let’s call it ‘NCS 1.0’) on the premise that it would be funded from a levy of 10 percent of people’s assets.

Crucially, this levy was only applied after death, based on the estate that was left behind. Rightfully, in opposition, Andrew Lansley called it a “death tax”, and voters recoiled at the idea of it.

Today, the second iteration of this scheme – NCS 2.0 – is likely to be even more overt in its seizure of personal wealth. Unlike NCS 1.0, which politely waited until death, Burnham’s new version will start billing the care recipient once they turn 65.

This already happens when someone has to enter residential care, with anyone whose existing assets total over £23,250 obliged to pay all their costs. However, people are usually a good deal older than 65 when this happens.

Burnham’s ambitions may be initially popular, but the reality of bringing this much-hated asset-draining system forward to perfectly healthy 65-year-olds who may not even need it (and will now be a year out from even being able to claim their state pension) will prove a rude awakening.

The second issue is cost. The current value bandied about is £18 billion, with costs rising to cover full implementation. Yet given the reputation of recent projects in Britain arriving late, over budget, and falling short of the initial expectation, it is difficult to believe that this reform would be anything close to £18 billion.

We need not even use our imaginations: Scotland has shown us why this idea would not work.

In 2022, the Scottish Government introduced an identical scheme with the aim that it would be delivered this year. Following major opposition from unions, local councils, and care providers, it was forced to scrap the idea after projected costs ballooned to over £2 billion, compared with an initial projection of £644 million. This is what our Prime Minister wants Britain to replicate.

Beyond the cost, Burnham has not considered the incentives he will create by creating such a system and promoting it in this way. Demand for this service would likely explode if people thought of it as “free”. The cheapest form of social care in Britain today – families taking care of loved ones – would be passed to the taxpayer.

The £18 billion based on today’s metrics would skyrocket once people perceive the service as a free handout to which they are entitled, in the same way that welfare has in recent years.

This does not mean that social care is irreformable. A civil society worthy of the name would seek to help those struggling to care for the elderly through a mix of sensible insurance measures, targeted safety nets and reasonable support for the families doing the heavy lifting, taking care of the weak and vulnerable. This is cost-effective and compassionate.

But the Prime Minister’s NCS 2.0 is none of these. It hides the cost of this problem by nationalising it, branding what is effectively a tax as a gift. No one voted for this system. Scotland has tried and failed. Britain cannot afford this expensive mistake, and it should not be forced to bear this cost.

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Emmanuel Igwe is an economist at the Prosperity Institute.

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