A death tax ‘doom loop’ threatens Burnham’s biggest policy gamble

Leasing Linda, the robot carer in Diane Morgan’s terrific new BBC comedy Ann Droid, allows owner Sue to stay at home after she breaks her wrist. Former prime minister Margaret Thatcher ended her days in the comfort of The Ritz. Most of us, towards the end of our lives, will end up somewhere in between. With the vim of a man who knows he has a limited amount of time to spend political capital, Andy Burnham will use a speech on Wednesday to set a direction for English adult social care. There have been 22 botched attempts at reform in the past 30 years, and still most publicly funded social care is only available to those who have high needs and low assets. Burnham has said he wants care delivered “on an NHS basis” – free at the point of use, funded through taxation. That’s a much bigger ask than tinkering at the edges, and it’s the same territory that proved so tricky before. As health secretary in 2010, he proposed a National Care Service funded by a deferred levy on estates after death. When the Tories labelled the policy as a “death tax”, the name stuck and killed the idea. He’s yet to rule it out again, but if he pursues the estate tax route, he faces the same arguments. “There is a problem that if you look at the polling, social care doesn’t appear near the top of people’s priorities,” Tim Bale, co-author of the British General Election of 2024, told The i Paper. “Most people don’t acknowledge it as a problem; not everybody gets dementia or needs a long stay in a care home. So, any tax will hit them much faster than the problem. “The way Burnham needs to sell this is to make the link clear with the NHS failing. People do recognise that the NHS needs help. The Prime Minister can avoid making this a class issue if he scraps inheritance tax, which is incredibly unpopular, and instead makes it a hypothecated social care insurance. Then people can see what they are getting.” Failures carry a heavy political cost. Chronic underfunding has made pay and conditions so poor that post-Brexit visa rules were loosened, and care workers from abroad became the single biggest driver of record net migration. The cost of care work, barring a robot takeover, is only going to rise. According to the Office for National Statistics (ONS), in mid-2024 there were 1.75 million people aged 85 years and over. By mid-2049, this is projected to have doubled to 3.6 million. Meanwhile, delayed discharges from hospital – some while care home slots are found – will cost the NHS £2.7bn this financial year. Burnham is unlikely to set out much detail in his Wednesday remarks, but hearing what he thinks an alternative funding model will look like is key. In one of its first acts in government in 2024, Labour scrapped plans to introduce a cap on social care costs recommended by economist Sir Andrew Dilnot which would have forced councils to implement a lifetime cap of £86,000 on care costs. Despite Dilnot’s proposals being widely accepted in Whitehall, his ideas appear to have fallen out of political favour. Depending on who you talk to, some propose an insurance-based system where people pay into a fund for their own future care. Others have suggested stripping funding responsibility away from local councils – whose revenues are falling behind local needs – and pairing it with a council tax revaluation to fund care nationally. More still favour the Danish model of a universal tax-funded system. So just how radical does Burnham want to be? A less drastic change could be to look north to Scotland, which guarantees free personal care and nursing care payments via the state, while non-personal help and residential accommodation costs remain means-tested. Perhaps Burnham will answer none of these questions and limit himself to announcing he’s speeding up Baroness Louise Casey’s independent review of adult social care, which had been due to report in 2028. Casey herself has already warned there’s no quick fix and that reform without public backing won’t stick. Burnham knows he needs political cover and consensus-building before he commits to a model, not just the current strength of his boosted poll numbers and political will. Only the Liberal Democrats have not put any conditions on their support for reform. The Tories say Burnham should not raise taxes to fund social care and Reform UK say they would “fight a death tax every step of the way”. Inheritance tax raised £8.25bn during the 2024/25 fiscal year, but fewer than one in 20 estates actually triggered a charge, largely because the standard individual tax-free threshold starts at £325,000. A blanket 10 per cent charge could be unpopular if it brought those who had planned to leave small legacies into a new tax bracket, but it also might encourage those with larger estates not to pay armies of accountants to give away wealth to protect against the 40 per cent top bracket on IHT. According to Hugh Aldwick, the Health Foundation’s director of policy and research, the English system “desperately needs reform after decades of political neglect and underfunding. Many of the problems in social care are well known – as are options for reforming it. What’s needed now is political will and investment to make reform a reality.” Making the public pay attention is another story. According to Aldwick, around a third of people in England incorrectly think that social care services are free at the point of need, like the NHS. When the options are explained, most think the current means-tested system is unfair and favour a system where the state takes more responsibility for the costs of care, either through some universal entitlement with additional means-tested services or an NHS-style system with care that is free at the point of use. People who intend to vote Green or Reform UK are more likely to think the state should be entirely responsible for paying for care. “It would be fantastic if the Prime Minister was to make a positive case for reform,” Sarah Woolnough, CEO of health charity The King’s Fund, told The i Paper. “One of the dangers is we go straight to a funding model discussion and that is when you get into ‘death tax’ doom loop and only talk about what it costs. The bigger prize of a better social care system is how it helps people live well, with dignity, as well as taking strain off the NHS and helping families with caring responsibilities.” All the signs are there that Burnham does want to fix such an intractable problem. He has spoken about how his father has Alzheimer’s and lives in a care home. He has been pushing for change for a number of decades. The Department of Health and Social Care has already spent money on sponsoring a public conversation. Burnham kicking it off is a good start.