When Andy Burnham steps into No. 10 Downing Street, he will inherit a slate of entrenched and costly policy challenges that have long vexed governments. BBC Verify has outlined five major areas where Burnham will need to act, and how he might approach them, drawing on official reports, parliamentary debates, and policy histories. The lens is not a forecast of policy choices but a synthesis of the constraints and trade-offs that have constrained previous administrations.
Welfare and the sickness and disability bill is a central test. The bill for sickness and disability benefits for working-age people has risen since the Covid era and now sits at about £58 billion a year, and projections show it could climb to roughly £78 billion by 2030. The main driver is the number of people claiming Personal Independence Payments (PIP), a benefit designed to offset higher living costs for those with disabilities. The number of Pip claimants is forecast to increase from about four million today to five million by 2030. The share of claimants under 65 with mental health problems or neurodevelopmental disorders is rising, complicating reform efforts. The previous Conservative government tried to curb the bill through eligibility changes, but activism within the Labour ranks forced reversals. A recent interim Timms report, produced with disability groups, judged Pip as not fit for purpose, and Burnham could consider reforms later this year. Within this context, Burnham has signaled a desire to reduce the welfare bill but via policies that aim to move people into work rather than through blunt cuts. The risk remains of backlash from disability groups and potential Labour MPs if reforms are viewed as unfair, complicating any path forward.
Defence is another pressure point. After a delay, the Defence Investment Plan set a trajectory that lifts spending to 2.7% of GDP by 2030, sparking debate over whether the target should move to 3% or higher. The case for increasing the budget by about £9 billion a year relative to current plans will be a live question, especially against a NATO target of 3.5% by 2035 that would imply further upward pressure on spending, roughly £24 billion a year versus current plans. Proposals for financing could include creative approaches such as “war bonds,” though any new funding would have to be reconciled with other Whitehall departmental savings. Beyond funding, defence procurement would need reform after long-standing issues with project delivery, with only a small share of major projects rated green in recent assessments.
Social care has long been described as underfunded and unfair by those in and around politics. In England, public funding is means-tested, and there are an estimated two million older people with unmet social care needs. Around 10% of people aged 65 and above face lifetime care costs above £100,000. Burnham has previously described the system as broken and, in past years, floated options such as capping lifetime costs or altering the means test—ideas that have sparked political controversy. The 2011 Dilnot proposals for a state-funded cap on lifetime care costs were never implemented, and subsequent reform attempts have varied in scope and direction. A 2024 Labour manifesto proposal for a national care service has lingered, with Baroness Casey tasked to deliver a review by 2028; Burnham has suggested asking for an earlier briefing by 2026. Any reform is likely to require substantial funding, with discussions of additional billions per year on top of existing subsidies. Proposals have included using inheritance tax adjustments, though public opinion and political dynamics have repeatedly complicated such options.
Housing remains a high-visibility issue. The government pledged to deliver 1.5 million new homes in England over five years, implying an average of 300,000 per year, but delivery has fallen far short. In the year to March 2026, English councils delivered about 204,000 homes, and councils’ 2025 output for rented housing stood at 1,970 units, far below the hundreds of thousands delivered in the 1950s. The Starmer government has committed roughly £4 billion per year in subsidies to support around 30,000 social and affordable homes annually, but Burnham is expected to weigh whether to reallocate funding toward councils or housing associations to accelerate supply. Analysts estimate that a major uplift would require an additional roughly £13 billion per year in subsidies above the current level, highlighting the scale of the financing challenge. Borrowing could be part of the strategy, but it would need to align with fiscal rules Burnham has said he would keep.
The Neets issue—young people not in employment, education, or training—also features prominently. Just over one million young people aged 16-24 in the UK are Neets, roughly one in seven of the total. The Neet rate in 2015 placed the UK mid-pack among EU countries, but in 2025 it rose to the second-highest rate after Romania. Contributing factors include a drop in the number of 19- to 24-year-olds entering apprenticeships since a reform widely viewed as botched in 2016. A government-commissioned report led by Alan Milburn described the Neet rate as an “urgent national crisis.” Burnham could face policy choices around training opportunities or guaranteed work placements, as well as a rebalanced emphasis on vocational education. He has signaled a need to move away from a system biased toward university routes, though how that translates into concrete programs and funding remains to be seen.
The levers involved are complex and politically sensitive, with fiscal realities and social implications shaping the options available to Burnham. The five challenges—welfare and Pip reform, defence spending and procurement, social care financing, housing supply and subsidy, and youth employment—form a cross-section of long-standing concerns that have repeatedly dominated policy conversations. Burnham’s approach will be watched for how it balances fiscal discipline with the demand for expanded public services and strategic investment.
Each area reflects trade-offs between immediate budget pressures and long-run social and economic outcomes. The path Burnham chooses will have implications for state capacity, the direction of public investment, and the country’s competitiveness, particularly around the housing market, the care economy, and youth employment pipelines.
