The Labour Party under Andy Burnham

[ainsworth74]

Where does all the money go? What do they do with it? The truth is that too much of it goes into the pockets of the hedge funds behind our privatised companies and too little of it goes into those services. The water companies are obviously the poster children for hedge fund greed and incompetence, but it is rampant across all sectors.

Absolutely, take another example. One of the reason local authorities are going bust or at least are slashing services is the cost of care. This leads to the complaints "What does my Council Tax go on when the bins are being collected once a fortnight and the roads are full of potholes?!" which resonates deeply, for understandable reasons with people. Why does care cost so much? Well lets take children's care as an example. There's actually an article from the BBC today on this subject (but it's been boiling for a while). And seems that 84% of children's homes are run for profit with 15 of the largest providers having a profit margin of 22%. In 2023-24 Councils paid £3.1bn on residential placements and on average around £318k per child per placement. At the same time the quality of care provided by these private providers is often absolutely atrocious.

The cost of residential care for vulnerable children in England has nearly doubled in five years but many children still do not receive appropriate care, says a report from the independent public spending watchdog.

The National Audit Office (NAO) says councils on average spent £318,400 on each child placed in a children's home in the year ending March 2024.

But these huge sums do not represent value for money, the report concludes.

"I do not know where the money is being spent," says Ezra Quinton, now 20, who recalls smashed windows and broken glass in the showers of one of the care homes he was placed in.

Ezra, who now works with Become, a care leavers' charity, first went into care aged nine.

Originally from Greater Manchester, he remembers being moved to a different home every few months, often many miles from where he originally lived.

He thinks he had up to 60 different placements and although he has spent most of his life in Salford and Stockport, he has lived in Wales, Liverpool, Crewe and Leeds.

His education was considerably disrupted but he did achieve C grades in all of his GCSEs.

At one home the windows were boarded up because of smashed windows.

"We were told to wear shoes if we wanted to shower because they didn't clean up the glass properly," he told BBC News.

Cost of children's homes doubles but care can be poor

Huge sums spent on children's residential care in England do not represent value for money, says spending watchdog.

www.bbc.co.uk

So councils that are broke are forking out huge sums of money on placements which are poor quality for children who are already generally vulnerable. Those poor placements then lock in issues for those children down the line which mean even higher costs for the police, NHS, and just society in general. Meanwhile private providers of these placements are making vast sums of money. It's frankly obscene but here we are.

You will find similar issues throughout the state and the way we deliver services. Adult social care and care homes are in a very similar boat. I'm not saying that should nationalise all the things but the way we privatize so much of the state is demonstrably not working and one of the reasons why it feels like our taxes are ever higher at the same time we get ever less.

 

[Tetchytyke]

Still looking in really small 'pots' of savings by looking at hedge funds extracting money from water and health sector.

Not that small.

About £46bn or so gets spent on "personal social services", mostly care homes for children and older people*.

*source: https://assets.publishing.service.g...8abb50d9b8/PESA_2024_CP_Chapter_5_tables.xlsx

The Centre for Health and the Public Interest** reckons c. 20% of that money leaks away in profits and hidden profits to the offshore hedge fund owners of for-profit care homes. £6bn or so may not sound like a great deal in the grand scheme of things, but it would pay for our entire prison estate costs.

**source: https://www.chpi.org.uk/blog/the-hidden-profits-behind-collapsing-care-homes/

On closer examination, we found that a substantial proportion of the debt and rent payments being made by these providers are to related companies. In terms of their debts, the 5 largest private equity-owned or backed care home providers have borrowed £35,072 for each care home bed that they own, which leads to an interest cost of £102 per bed per week, that’s 16% of the average weekly fee for residential care. This contrasts to the 8 largest not-for-profit providers who have a debt of £21,069 per care home bed and interest costs of £19 per bed per week.

The UK pays billions in interest on its national debt each year, with forecasts for the debt interest spending in 2025-26 to be £111.2 billion [This could pay for a brand new HS2 line each and every year!]

I'd agree that the debt payments are an issue, although it begs the question where the money that was borrowed was actually spent.

Debt went from 40% of GDP in 2010 to 100% of GDP in 2020, despite ten years of austerity. Where did all the money go? Did it go to the banks, by any chance?

 

[ainsworth74]

Here's some coverage from the Daily Mail of the issue of children's homes from January 2025:

Some of England's biggest privately-run children's homes have raked in more than £95million in profit in the past three years, The Mail on Sunday can reveal.

The firms, which have been draining millions from the budgets of cash-strapped councils, include outfits controlled by private equity firms, as well as the daughter of a former City stockbroker linked to fraud.

Data from regulator Ofsted shows private firms dominate the sector, with 83 per cent of children's homes under their ownership. The draw is that the industry is lucrative.

Last year, a report by news website This House revealed that the average cost of placing a child in care was £281,000 a year, five times that of keeping an adult in prison.

It followed a 2023 report from the Local Government Association that showed some councils were paying as much as £63,000 a week to keep a single child in care.

But the cost does not always translate into better service. A 2022 study from the University of Oxford concluded that for-profit providers were 'significantly more likely' to be rated of lower quality than public alternatives.

Private groups also violated more requirements and received more improvement recommendations. This is despite the most recent Ofsted data from 2019 saying eight of the ten largest private and voluntary children's home providers had a higher-than-average number of homes rated good or outstanding.

Of the 2,748 children's homes in private hands, 18 per cent are run by the top five operators.

England's second-biggest children's home operator is Keys Group, with 116 locations. It is owned by G Square Capital, a private equity firm based out of London's fashionable Savile Row. Between 2022 and 2024, Keys Group made an overall operating profit of £7.8million.

Another private equity player is Netherlands-based Waterland, the owner of Aspris, which runs 81 children's homes. The firm raked in £14.6million in 2023, according to its most recent accounts, reversing a £4.7million loss from the previous year.

A big private operator is HCS Group, trading under the name Hexagon Care Services. It runs 56 children's homes in England. Hexagon is owned by 28-year-old Melissa Bell, who took control of the firm in 2016 when she was just 19 and a student at the University of Manchester.

Children's homes run by private equity rake in millions

The companies include outfits controlled by private equity firms, as well as the daughter of a former City stockbroker linked to fraud.

www.thisismoney.co.uk

Vast sums of money are being funneled from taxpayers into private hands for the delivery of worse services at higher costs. If you wanted to free up some more money a good starting point might be looking at whether outsourcing everything that moves is actually delivering value for money compared to either doing it inhouse via the state or in some sort of combination with private and state involvement.

 

[Tetchytyke]

You will find similar issues throughout the state and the way we deliver services. Adult social care and care homes are in a very similar boat. I'm not saying that should nationalise all the things but the way we privatize so much of the state is demonstrably not working and one of the reasons why it feels like our taxes are ever higher at the same time we get ever less.

You just beat me to it!

It's throughout the entire state. Serco alone has contracts with the UK government worth almost £5bn, with a profit margin of 5% on paper (in reality, it is much higher).

Same with housing. Social housing, owned by the state, has been privatised through right-to-buy. The Mirror reported back in 2013 that a third of ex-council homes are now owned by large scale property investors. Charles Gow, the son of the Tory housing minister and Thatcherite aide who brought right-to-buy, owned 40 of them just in one estate.

Great Tory housing shame: Third of ex-council homes now owned by rich landlords

The son of a former Tory Housing Minister and Mrs Thatcher aide during the peak years of right-to-buy owns at least 40 ex-council property

www.mirror.co.uk

Tycoon Charles Gow and his wife own at least 40 ex-council flats on one South London estate.

His father Ian Gow was one of Mrs Thatcher’s top aides and was Housing Minister during the peak years of right-to-buy.

Other wealthy investors own scores of ex-council properties via offshore holding firms in tax havens in the Channel Islands, the GMB union has found.

The situation has only got dramatically worse since then.

Housing benefit paid to social tenants is then paid to social landlords, who reinvest the money in their estate.

Housing benefit paid to private tenants, on the other hand, is paid to private landlords and the money is then squirrelled away to holding firms in offshore privacy jurisdictions (including the one I live in!). On top of that, private rents are routinely significantly higher than social rents, so the state is paying more in housing benefit and getting less in return.

The housing benefit bill is about £23bn a year. Whilst only about 30% of recipients are in the private sector, about 65% of the total bill goes to private tenants who, of course, simply pass it on to their offshore landlord.

 

[ainsworth74]

The situation has only got dramatically worse since then.

Housing benefit paid to social tenants is then paid to social landlords, who reinvest the money in their estate.

Housing benefit paid to private tenants, on the other hand, is paid to private landlords and the money is then squirrelled away to holding firms in offshore privacy jurisdictions (including the one I live in!). On top of that, private rents are routinely significantly higher than social rents, so the state is paying more in housing benefit and getting less in return.

The housing benefit bill is about £23bn a year. Whilst only about 30% of recipients are in the private sector, about 65% of the total bill goes to private tenants who, of course, simply pass it on to their offshore landlord.

The thing that always gets me that we'll happily use taxpayer money to help private landlords buy houses through the Housing Benefit (and increasingly Universal Credit Housing Costs Element) of that their tenants receive but if you're paying a mortgage on your own home and end up relying on benefits you're out of luck. Best we can do is a further loan secured against your house to help you pay the interest on your mortgage. Quite apart from any other issues (and they're there as you highlight) that one has always struck me as barmy.

 

[Tetchytyke]

Quite apart from any other issues (and they're there as you highlight) that one has always struck me as barmy.

Definitely. The nine month waiting period is similarly insane.

These people will therefore often end up selling their house to one of the sale-and-leaseback companies, at which point the housing benefit/UC housing element will cost significantly more money than if the DWP had just paid their mortgage interest in the first place.

 

[JamesT]

I'd agree that the debt payments are an issue, although it begs the question where the money that was borrowed was actually spent.

Debt went from 40% of GDP in 2010 to 100% of GDP in 2020, despite ten years of austerity. Where did all the money go? Did it go to the banks, by any chance?

The budget deficit in 2010 was £103bn/7.3% of GDP. 'Austerity' merely got it down to balancing the books before Covid hit.
The bank bailout wasn't a significant part of that, as it was mostly structured as loans which were later repaid, guarantees where money didn't change hands, or equity stakes which were later sold. Institutions taking advantage of government support also had to pay fees.
2008 did result in a recession, so unemployment support etc. would have gone up at the same time that tax receipts fell. We then had a decade where productivity and growth have flatlined, so there wasn't really the recovery you'd normally expect to pay that back.

 

[Nicholas Lewis]

As i said a few days back Starmer needs to wake up to how poorly advised he has been over Mandelson appointment. Like Johnson with Cummings Starmer is allowing McSweeney to run far too much. I wouldn't be surprised he got the dirt on Rayner and then use her departure as a catalyst to reshape the cabinet with his followers. The country voted for change and Labour had the majority to deliver that but there squandering currently. McSweeney needs to go and Starmer needs to show leadership and a lot more presence about what he is going to do for country. I don't like Trump one bit but he makes sure he gets plenty of airtime everyday promoting what hes doing whether you like or not. Yes things dont look much better one year on but they need to promote what they've changed and how that will improve things in the future.

 

[philosopher]

I have already read two articles this morning saying how Kier Starmer days look numbered.

This is from the Guardian:

Keir Starmer warned ‘time running out’ to repair faltering leadership

After disastrous week, some MPs predict challenge against PM likely if local and Welsh elections go badly next May

www.theguardian.com

Keir Starmer has been warned that time is running out to repair his faltering leadership, with Labour MPs beginning to ask whether he could be challenged as prime minister.

After a disastrous week in which Angela Rayner resigned and Peter Mandelson was sacked as ambassador to Washington, a number of MPs said a challenge was likely if local and Welsh elections went badly next May. Some said the one thing now protecting Starmer was the lack of an agreed replacement.

The second article is from the BBC:

Labour MP says Starmer not 'up to the job' as Mandelson backlash grows

No 10 say Peter Mandelson was sacked as the UK's ambassador after new information about his links to Jeffrey Epstein came to light.

www.bbc.co.uk

Labour MP Clive Lewis has said Sir Keir Starmer "doesn't seem up to the job" as anger grows over Peter Mandelson's appointment as an ambassador and the handling of his sacking.

Mandelson was fired over links to convicted paedophile Jeffrey Epstein. The men's friendship had been known about at the time of his appointment but No 10 said new information about their relationship only came to light this week.

I think it is increasingly a matter of when rather than if Kier Starmer gets replaced, particularly after the last couple of weeks.

 

[brad465]

Mandelson has so much baggage, if he flew Ryanair they'd single-handedly bankrupt him.

 

[Magdalia]

Debt went from 40% of GDP in 2010 to 100% of GDP in 2020, despite ten years of austerity. Where did all the money go? Did it go to the banks, by any chance?

The UK has been running a balance of payments deficit since the 1980s. Until the 2008 crash the domestic counterpart of that was mainly in the household sector. People can argue about the transmission mechanism, but one big macro effect of the crash, and the government response to it, was a change to the domestic counterpart of the balance of payments deficit being mainly in the public sector.

We then had a decade where productivity and growth have flatlined, so there wasn't really the recovery you'd normally expect to pay that back.

Osborne's economic policies were based on an assumption that the post crash recession was temporary, and that productivity/growth going up by c2% per year would return. A lot of this was the mistaken assumption that quantitative easing would feed through into the real economy, instead it mainly resulted in asset price inflation.

Where did all the money go?

A lot of it went to the people who own assets, especially houses.

In more recent times the responses to covid and high energy prices have added to the public sector deficit and debt.

The latter also fed through into higher interest payments because of the return of high inflation and high interest rates. One peculiar feature of UK government debt, that has exacerbated this, is the amount of debt in the form of index linked bonds linked to the retail price index.

 

[dosxuk]

I think it is increasingly a matter of when rather than if Kier Starmer gets replaced, particularly after the last couple of weeks.

Maybe it would be, but only if there was a clear candidate to replace him in the wings, which there isn't.

 

[Nicholas Lewis]

I have already read two articles this morning saying how Kier Starmer days look numbered.

This is from the Guardian:

Keir Starmer warned ‘time running out’ to repair faltering leadership

After disastrous week, some MPs predict challenge against PM likely if local and Welsh elections go badly next May

www.theguardian.com

The second article is from the BBCL

Labour MP says Starmer not 'up to the job' as Mandelson backlash grows

No 10 say Peter Mandelson was sacked as the UK's ambassador after new information about his links to Jeffrey Epstein came to light.

www.bbc.co.uk

I think it is increasingly a matter of when rather than if Kier Starmer gets replaced, particularly after the last couple of weeks.

Im not sure Starmer is at that much of risk as the Labour party doesn't have the Torys 1922 committee to unseat him. That said he needs to bite the bullet and get rid of McSweeney and all the other hangers on in N0.10 as its looking more and more like the Torys with loads of well paid unelected advisors. I also don't understand how hes letting Phillipson compete for the Deputy Leadership would have been better off letting it go to the soft Left ie Lucy Powell so he has a connection into that wing of the party.

 

[DustyBin]

Maybe it would be, but only if there was a clear candidate to replace him in the wings, which there isn't.

I dread to think who’d through their hat into the ring!

 

[styles]

I have already read two articles this morning saying how Kier Starmer days look numbered.

This is from the Guardian:

Keir Starmer warned ‘time running out’ to repair faltering leadership

After disastrous week, some MPs predict challenge against PM likely if local and Welsh elections go badly next May

www.theguardian.com

The second article is from the BBC:

Labour MP says Starmer not 'up to the job' as Mandelson backlash grows

No 10 say Peter Mandelson was sacked as the UK's ambassador after new information about his links to Jeffrey Epstein came to light.

www.bbc.co.uk

I think it is increasingly a matter of when rather than if Kier Starmer gets replaced, particularly after the last couple of weeks.

I'm not so sure.

It seems national politics has recently favoured two interesting approaches to scandals:

1. Remain in post for as long as possible despite personal wrongdoing (e.g. partygate)
2. Any time the opposition party messes something up, call for resignation.

Starmer himself wasn't the one writing creepy messages to Epstein, or underpaying tax on a new home. People in his upper circles were and he (perhaps not as promptly as I'd like) sacked them. I don't think that's really a resigning matter for Starmer, otherwise we'll end up with the ridiculous situation we had with the Conservatives changing prime ministers quicker than I change my socks.

We have to get to some sense of stability and which I cabinet reshuffle is far from ideal, it's a long less disruptive than changing prime minister.

I'd like Starmer to go because he's uninspiring, lacking in direction, and always to whichever way the polls go, not because one of his appointed ambassadors has some fresh damning material leaked and Starmer subsequently sacks him.

 

[Railwaycat]

As i said a few days back Starmer needs to wake up to how poorly advised he has been over Mandelson appointment. Like Johnson with Cummings Starmer is allowing McSweeney to run far too much. I wouldn't be surprised he got the dirt on Rayner and then use her departure as a catalyst to reshape the cabinet with his followers. The country voted for change and Labour had the majority to deliver that but there squandering currently. McSweeney needs to go and Starmer needs to show leadership and a lot more presence about what he is going to do for country. I don't like Trump one bit but he makes sure he gets plenty of airtime everyday promoting what hes doing whether you like or not. Yes things dont look much better one year on but they need to promote what they've changed and how that will improve things in the future.

You are so right about McSweeney.

We went to one of the political journalist Steve Richards talks at the Edinburgh Fringe, the subject for the day being the influence of political advisors/spin doctors. Apparently (and this was from someone who is 'in the know'), McSweeney has way to much influence, far more than Cumming and Alistair Campbell, and the back benchers don't like it. He keeps totally out of the limelight - if you google him you get just one photo (last month) - I'd seen his name mentioned, but I actually thought he was a she (Morgan)!
He also referred to Starmer as a lawyer, not a politician - he's not good at politics.
McSweeney has to go, and the sooner the better.

p.s. Andy Burnham was seen as a perfect Starmer replacement, which the audience agreed with.

 

[Tetchytyke]

I wouldn't be surprised he got the dirt on Rayner and then use her departure as a catalyst to reshape the cabinet with his followers.

It’s widely believed in Labour circles that he was the one using the BBC to force Sue Gray out, and it’s also widely believed in Labour circles he was the one who leaked the issues about Louise Haigh (who was one of Gray’s allies).

He’s a nasty piece of work and he’s going to do to Labour what Cummings did to the Tories. He’s not the only nasty piece of work in Starmer’s inner circle though. Luke Akehurst is vile too.

 

[Thirteen]

The issue with getting Burnham is he's currently not a MP and he's not going to be able to get a seat until he steps down as Mayor of Greater Manchester.

I think between him and Sadiq Khan, Burnham's more likely to return to Westminster because as I mentioned before, Khan might be done with politics.

 

[gg1]

The issue with getting Burnham is he's currently not a MP and he's not going to be able to get a seat until he steps down as Mayor of Greater Manchester.

I think between him and Sadiq Khan, Burnham's more likely to return to Westminster because as I mentioned before, Khan might be done with politics.

That's more of an inconvenience than a major obstacle.

It's convention that the PM is an MP but not a requirement. If he was elected leader, the most likely scenario is an MP in a safe Labour seat would be persuaded to stand down with Burnham standing in the resulting by-election.

 

[JamesT]

That's more of an inconvenience than a major obstacle.

It's convention that the PM is an MP but not a requirement. If he was elected leader, the most likely scenario is an MP in a safe Labour seat would be persuaded to stand down with Burnham standing in the resulting by-election.

You're correct that it's merely convention that the Prime Minister is an MP. However, the current Labour Party rules for electing the party leader does require candidates to be MPs. I don't see them fudging that to get Burnham in if Starmer steps down.

 

[jfollows]

The idea that a Prime Minister would not also be a MP is laughable in this age of accountability. And a good thing too.

 

[KevinBrum12]

That's more of an inconvenience than a major obstacle.

It's convention that the PM is an MP but not a requirement. If he was elected leader, the most likely scenario is an MP in a safe Labour seat would be persuaded to stand down with Burnham standing in the resulting by-election.

Indeed and there are plenty of safe Labour seats in Greater Manchester. The Guardian suggests there is a veteran Manchester MP looking to stand down "for health reasons" and No. 10 are desperate for them not to.

If Rayner wanted to put a stiletto in McSweeney's backside taking the Hundreds would be a way of doing it, but the problem for Burnham is that Ashton-under-Lyne is not as safe a seat as it was in July. Reform would see it as a prize.

 

[jfollows]

Can Keir survive? Inside the plot to bring down the prime minister

With his government mired in scandal, an operation to dethrone Starmer is now under way

www.theguardian.com

The one name, however, that has attracted more and more warmth over recent months is that of Andy Burnham, the mayor of Greater Manchester. MPs have shared data showing he is the only Labour politician with a net positive rating from the public. A third of the UK sees him favourably which is the political equivalent of a rave review.

Burnham also reaches across the party. The Guardian has spoken to individuals in both the centrist Labour Growth Group of MPs and in the Socialist Campaign Group who have all come to the conclusion that he is the only option.

He has backed Mainstream, a new network set up to change Labour’s direction, and which will inevitably be seen as a vehicle that could be quickly transformed into a leadership operation if needed. When asked by the Guardian last week, Burnham did not rule out the possibility of running in a future leadership contest with the network’s support.

Burnham is not an MP and therefore is not eligible to run but this is not an insurmountable problem. Senior Labour party figures revealed that an existing Manchester MP who is in ill health is ready to stand down, causing a byelection – the party leadership is likely to do everything it can to block it.

I haven’t (yet) worked out who the mystery MP is.

Graham Stringer, MP for Blackley and Middleton South.

Graham Stringer - Wikipedia

en.wikipedia.org

53.8% of the vote in 2024, Reform next at 21.1%, Green 10.2%, Conservative 9.8%, Liberal Democrats 5.1%.

 

[KevinBrum12]

The other big problem for Burnham is just like Lord Mandelson, he has baggage from New Labour days. Although previous Labour Health Secretaries are probably more culpable especially Patricia Hewitt he was the SoS in post when the Mid Staffs Hospital scandal came out and it was not his finest hour.

 

[317 forever]

Bridget Phillipson is looking to be the frontrunner.

Generally boring, and probably not holding the positions to swoon Reform voters on immigration policies.

I think she will be a more forceful speaker against Reform (and the Tories) than Lucy Powell.

To digress a bit, Lucy was born with more General Election experience, as she was born on the day of the October 1974 GE

 

[BAFRA77]

Wasn’t Powell the one who came up with the idea of the “Ed-Stones”?

 

[brad465]

The other big problem for Burnham is just like Lord Mandelson, he has baggage from New Labour days. Although previous Labour Health Secretaries are probably more culpable especially Patricia Hewitt he was the SoS in post when the Mid Staffs Hospital scandal came out and it was not his finest hour.

Existing baggage hasn't stopped previous PMs: Thatcher had the "milk snatcher" nickname while in the Heath government, Brown had the gold selling troubles 9 years before time as PM (albeit he wasn't a election winner PM), and don't get me started listing Boris Johnson's baggage as Mayor and Foreign Secretary...

 

[J663738]

Is anyone really serious about Andy Burnham running for PM, I think to be honest he has already passed his level of competence.

 

[brad465]

Wasn’t Powell the one who came up with the idea of the “Ed-Stones”?

I thought that was Ed mis-interpreting the meaning of "our policies need to be readable on tablets."

== Doublepost prevention - post automatically merged: 13 Sep 2025 ==

Indeed and there are plenty of safe Labour seats in Greater Manchester. The Guardian suggests there is a veteran Manchester MP looking to stand down "for health reasons" and No. 10 are desperate for them not to.

If Rayner wanted to put a stiletto in McSweeney's backside taking the Hundreds would be a way of doing it, but the problem for Burnham is that Ashton-under-Lyne is not as safe a seat as it was in July. Reform would see it as a prize.

This is a problem those seeking Burnham have: they can't remove Starmer while polling is poor enough that a by-election seeking Burnham's return is lost, so it's in their interest to help Labour short term. Whether they see that is another matter.

 

[KevinBrum12]

This is a problem those seeking Burnham have: they can't remove Starmer while polling is poor enough that a by-election seeking Burnham's return is lost, so it's in their interest to help Labour short term. Whether they see that is another matter.

Labour losing a seat in an unnecessary by-election with a massive majority would be a huge blow to the party as a whole. Another self inflicted wound.