How might Burnham Labour plan the funding of Residential Child Care?

A Burnham Labour government could finance Residential Child Care by restructuring the National Infrastructure and Service Transformation Authority (NISTA) into an independent body and expanding the definition of “infrastructure” to include social care.

Influenced by recent philosophy, principles and practice in Manchester, of state-led investment, a Burnham Labour government could shift NISTA from a standard civil service unit into a transparent, growth-predicting funding mechanism.

What could this mean for children’s social care and Residential Child Care in particular?

1. Redefining Social Care as Economic Infrastructure

• Treasury Rule Overhaul: A Burnham government could rewrite current HM Treasury rules that classify child care and social care spending as day-to-day consumption.
• Capital Asset Classification: Under the new framework, building and staffing residential child care facilities could be classified as long-term capital investments. This shift unlocks the ability to use long-term public borrowing for the sector under updated fiscal rules.

2. Granting NISTA Independent Borrowing Mandates

• The “Office for Budgetary Responsibility for Infrastructure” Model: Burnham could strip NISTA of its direct Treasury oversight and make it entirely independent.
• Multiplier-Driven Funding: NISTA could independently calculate and publish the “growth multiplier effects” of social infrastructure. By proving that stable children and families social care, including Residential Child Care, allows vulnerable families to stay in work and reduces long-term state costs, NISTA could justify issuing government bonds specifically ring-fenced for social care expansion. This is a different perspective than that of the Care Review and Reset constrained by fiscal rules of the previous government.

3. Implementing Devolution and Localised Financing

• Regional Care Commissioning: Capital raised via NISTA could be funnelled directly to regional Mayors and local authorities rather than being distributed centrally by Whitehall.  This would be in line with regional devolution and place-based projects.
• Land Value Capture: Similar to Burnham’s proposed infrastructure and transport funding models, local authorities could use “land value capture”. Increases in local land values yielded from public regeneration projects could be shared to cross-subsidise municipal children’s homes.

4. Rolling back privatisation, outsourcing and the market

• Rolling Back Privatisation: Consistent with Burnham’s pledge to “roll back the 1980s” regarding private utilities, NISTA’s funding pipeline could exclusively support public, local authority run, or non-profit residential facilities.
• Capital allocation conditions for private providers: NISTA could enforce strict capital allocation conditions to severely restrict funding by private equity firms and the speculative opening of homes shifting the sector towards achieving specificity of supply of the right sort of homes in the right places through state-backed and planned regional care model. This could enable a return to a regional planning perspective that was being developed before the introduction of commissioning.