As Andy Burnham prepares to take the reins at 10 Downing Street, he faces a daunting array of policy challenges that have confounded successive governments for years. At the heart of these issues lies a delicate balancing act between competing priorities: reforming welfare and defence spending while addressing the social care crisis.
One of the most pressing concerns is the escalating cost of sickness and disability benefits, which currently stands at approximately £58 billion annually. The Personal Independence Payment (PIP) – a benefit designed to support working-age individuals with disability-related living costs – is a major driver of this increase. With four million claimants today expected to rise to five million by 2030, policymakers are under pressure to find a solution. While previous governments have attempted reforms, including a failed attempt to cut £5 billion from the PIP bill by 2030, an interim report from Disability Minister Sir Stephen Timms has acknowledged that PIP is 'not fit for purpose'. The final report, due later this year, is expected to propose significant changes, including potentially offering therapy and support instead of cash payments for young people with mental health issues. However, such reforms may face opposition from disability groups and Labour MPs if perceived as unfair.
Defence spending also presents a major headache for the new Prime Minister. The government's Defence Investment Plan, published in June, outlines an increase to 2.7% of GDP by 2030, but this target has been criticized for not meeting the 3% advocated by former Defence Secretary John Healey. Achieving this higher target would require an additional £9 billion annually compared to current plans, with even more stringent demands expected under the new NATO target of 3.5% by 2035 – necessitating a further £24 billion per year. To fund these increases, suggestions have been made that 'war bonds' could be issued by the Treasury, avoiding tax hikes or cuts elsewhere. Moreover, Mr Burnham will need to address the historically inefficient defence procurement system, with only three out of 47 major projects meeting delivery targets in 2025.
The social care system in England is another area requiring urgent attention. The predominantly independent providers are underfunded and inequitable, with public funding means-tested and an estimated two million older people currently living with unmet social care needs. Long-term solutions, such as increasing investment or introducing a more comprehensive, publicly-funded model, remain elusive due to the sensitive nature of these discussions and competing political priorities.