Social care reform returned to the spotlight in Parliament last week, as the House of Lords debated the government’s strategy for improving care provision over the next two years. The wide-ranging discussion reflected not only the growing political urgency around the topic, but also the deep structural pressures facing the sector - many of which have a direct bearing on insurers dealing with high-value personal injury claims.
At Keoghs, our Complex Injury team and Care & Rehab SIG continue to monitor care costs closely, especially given the prolonged impact of inflation in recent years. Although inflation is easing in some areas, care rates remain persistently high, with a particular knock-on effect in cases involving long-term care provision. In this context, the House of Lords debate provides valuable insight into the direction of travel for policy, regulation, and workforce reform in the care sector.
Baroness Blake (responding on behalf of the government) confirmed a £3.7 billion uplift in social care funding, alongside an £86 million allocation for home adaptations and a record increase to the carer’s allowance earnings limit. She also emphasised the government’s commitment to a “fair pay agreement” for care workers, and pointed to the ongoing work of Baroness Casey’s independent commission, which is exploring the case for a National Care Service - initial findings are expected in 2026.
Multiple peers raised concerns about the professional status and career structure of the care workforce, calling for a reframing of the term ‘carer’ to better reflect the skill and value of the role. There was also cross-party support for preventive approaches to social care - especially early interventions that could reduce pressure on the NHS as well as long-term public expenditure.
The debate underlined a broader shift in government thinking, toward more integrated models of care delivery at the neighbourhood level and the use of digital infrastructure to improve information-sharing between health and care professionals.
For insurers, the significance of these developments is clear. The direction of social care reform has a direct bearing on future care packages, particularly in catastrophic injury claims where statutory provision and private provision often intersect. The government’s long-term ambition to increase the basic rates of pay in the sector - via the Fair Work Agency under the Employment Rights Bill - may improve consistency and quality, but also carries cost implications for damages awards.
We are also closely tracking the role of Skills England and initiatives to improve localised care training - an important factor in ensuring workforce availability and maintaining reasonable rates of provision across the UK.
In parallel, the government’s Immigration White Paper raises further questions around the sustainability of the care workforce. Proposals to limit access to overseas workers may add yet more pressure to a sector already struggling with recruitment and retention. Any such changes would have significant implications for availability and pricing in both domiciliary and residential care markets - something already being felt in claims handling and settlements. Read more here from our Care & Rehab SIG.
We understand the importance of accurate forecasting and evidence-based analysis when it comes to care costs. That’s why we’ll shortly be publishing our updated Care Rate Tracker, offering clients detailed data and commentary on national and regional trends in care provision. This will include insights into inflationary pressure, workforce trends, and statutory policy shifts shaping the market in 2025 and beyond.
If you would like to discuss the latest trends in social care reform and how they may affect ongoing or future claims, please don’t hesitate to contact us.
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