'Genuine impasse' at top of government about social care plan, insiders say

Sir Keir Starmer’s first five months have produced little sign of a plan for Labour’s promised National Care Service – and now I’m told there is a “genuine impasse” at the top of government over what to do about social care.

Health Secretary Wes Streeting publicly acknowledges “we can’t solve the NHS crisis” without improving what a government source describes as an “appalling” situation, in a system that’s meant to look after vulnerable and elderly adults in England.

But multiple sources tell me the Treasury is deeply nervous about the cost and that the prime minister is yet to make a decision on how to proceed.

Talks have so far failed to decide even whether to hold another review of the system. “Dither, dither, dither,” said one insider involved in the discussions.

But another source said: “Everyone wants to fix it but we don’t want to embark on something that then doesn’t happen.”

I understand the prime minister, health secretary and the Chancellor Rachel Reeves are due to meet a week on Monday to try to make some progress.

There is little controversy about the scale of the problem in social care, the system that helps older and disabled people with day-to-day tasks like washing, dressing, getting out of bed, eating and medication.

There are as many as 500,000 people waiting for care. Council budgets are stretched, some teetering on the edge of bankruptcy, in part because of care costs. As the population ages, thousands upon thousands of people are stuck without the care they need, and thousands more stuck in hospital because there isn’t the support they need at home.

Labour has given little detail on what its National Care Service would look like, but long-term reform would likely aim to address the shortage of care, the length of waiting lists, and the costs for people who don't qualify for free care, which can be crippling for families.

Ministers are considering whether to create a Royal Commission to look at the issue or a government-backed independent review, tipped to be led by the straight-talking Whitehall troubleshooter Dame Louise Casey.

The advantage of a Royal Commission? It’s not party political, so theoretically can bind every politician to back its solutions and make the warring parties work together.

The downside? It could take two or three years, pushing possible fixes to the urgent problems until after the next election.

An independent review of a year to 18 months could change things quicker. Without the kudos of the King, any plans would be easier for opposition politicians to reject – but Labour has a once-in-a-generation majority to vote through big reforms.

There are nerves, however, at the top of government about what any review might recommend. If it suggests an expensive new system quickly, then that would need billions in extra tax. Does the government have a mandate for that in this parliamentary term, having ruled out changes to the main tax rates?

If a review process took longer, would any political party want to go into the next election asking voters to pay more - even for the best of reasons, a shiny new social care system?

In truth, conversations about the process are only a symbol of the actual dilemma – not just what to do, but how to pay.

The Department of Health wants to get on with the process. The Treasury agrees that it’s a very serious problem that the government ought to fix (and people caught up in the system, often stuck in hospital, are costly to the whole NHS too). Yet the chancellor is understood to be nervous about the cost of any fix, which would run to many billions.

One source told me: “The Treasury is the block.” But a department insider rejects that characterisation, and says: “No one doubts the issue is huge, but any solution is expensive – everything is a trade-off.”

Others suggest Reeves wants reform but also wants to be sure of a full political backing from the neighbours at No 10. So it’s suggested both Streeting and Reeves are looking to Sir Keir.

A No 10 source told me the prime minister is “animated by solving the issue and is keen to proceed”, hence the meeting planned with the health secretary and chancellor in the next fortnight. The source denies the accusation of “dither”, saying it takes time to work out the right moves.

There is no suggestion this is a bruising split between ministers.

But another source familiar with the process told me: "As soon as the election was out of the way we went back into the same old stalemate." In other words, the Department of Health says please, the Treasury says no, and No 10 wants more time to think.

Inside the care sector itself, one leader says people are “worn” by the debate between different parts of government when the need for change is urgent. Another care source tells me “it’s already almost too late” and is upset at how the industry has been treated so far.

They say existing government plans and the decisions in the Budget have made life harder. Asking care providers to pay the extra costs of employers’ national insurance means that, effectively, “public services are charged to pay for a black hole in (you guessed it) public services”, they say.

The NHS itself will be exempt from those increased costs but, as things stand, not-for-profit organisations including some care charities providing public services will have to pay.

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A group of them have written to the chancellor as part of a grassroots campaign called Providers Unite, warning the increased payments could top £1bn. They have asked Reeves to look again at the changes or face “a systematic collapse of community care services across Britain”.

The chancellor told us after the Budget she is “not immune” to pleas from particular sectors, but there is no chance of her reversing the whole policy.

On top of charging more National Insurance, ministers are creating a negotiating body to improve pay and conditions for care staff. While the industry is broadly supportive of that aim, it will increase costs, and many believe they just can’t cover it without extra funding.

There is an obvious eagerness for the government to get on with the conversation about how to fix the system that cares for the most vulnerable adults in the long term. But, wearily, a source told me conversation in the industry is “so dominated by funding emergencies now, [long-term reform] is second order”.

When the prime minister, Streeting and Reeves sit down to consider what to do about social care in a week or so, don’t expect a sudden revelation or a shiny new plan. One source told me – in a line worthy of the sitcom Yes Minister – that the trio might “decide to decide, decide to delay deciding, or… decide not to decide”.

But the pressure is building on them to make a call.

While the Conservatives promised then failed multiple times to follow through with big changes to the system, the newly emboldened Lib Dems put social care right at the centre of their successful election campaign.

It’s the party’s signature issue, and rarely a day goes by without them pursuing a political opportunity to press the case. The Lib Dem leader Sir Ed Davey, who will join me on tomorrow's show, said that any investment in the NHS would be an "expensive failure" without social care reform.

"Ministers need to get a grip, and quickly," he said. "The cross-party talks we've been campaigning for should start now, but there are urgent actions the government should take regardless," such as a higher minimum wage for care workers.

And a spokesperson for the Conservatives said: "The Labour Party are piling on costs for social care providers and charities. The Local Government Association has warned that any extra funding will be consumed by the costs as a result of Labour’s budget."

Few in government would deny that a solution for social care is long overdue. Few in government would deny that patients are being let down, and families are being left without the support they need. And few in government would deny that Sir Keir’s mission to sort out the NHS is hampered by a lack of action.

A source familiar with the dilemmas told me it “beggars belief” that minsters can talk about giving the NHS extra billions and promising reform without doing the same for social care.

Yet nobody wants to repeat previous governments’ pattern, where plans were drawn up, pitched to the public, then ditched (the Scottish Government has again shelved plans for its promised National Care Service).

This time, according to one of the sources, “we all have to go into it with our eyes open”.

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