The Social Market Foundation think tank responds to the 7th May local election results 2026 by urging the government to adopt pragmatic – but more ambitious – policies in the upcoming King’s Speech.
Theo Bertram, Director at Social Market Foundation, said:
“The constraints facing government are real: high costs of high debt, an ageing population driving health and welfare spending higher, energy price shocks and inflation caused by geopolitics. These challenges cannot be overcome merely by a promise of hope or the complaint that Britain is broken.
But it is clear from the election results that the remedy offered by Keir Starmer’s government in its first two years – a promise of stability and steady progress – has felt to many like stasis and stagnation. This is a dangerous moment for the centre ground of British politics and Labour is running out of time: it must be transformational, not managerial.”
Dr Rebecca Montacute, Research Director at Social Market Foundation, said:
“The Social Market Foundation is working on the big ideas needed to finally make change a reality in Britain. Reforming social care and council tax together to unlock opportunities for change in both; making money available now to a generation locked out of the property ladder through our ‘Citizens Advance’; social leasing to give low income families access to electric vehicles – a green change that also shields families from fuel price volatility; streamlining opportunities for institutional investment in the assets we need for growth; and funding targeted to support lower income young people to tackle the NEET crisis.
The ideas are there – now government needs the courage to act on them.”
The Social Market Foundation alternative King’s Speech (see notes for details):
- Take social care out of council tax, allowing for major reform of both systems
- Introduce a ‘Citizen’s Advance’ – the option of a lump sum now in return for postponing your state pension
- Set up a Major Projects Office to encourage investment
- Introduce social leasing for Electric Vehicles to protect lower income households from Iran war fuel price spikes
- Extend the Pupil Premium to post-16 education to help tackle the long-term youth unemployment and lack of education (NEET) crisis
Contact
- Theo Bertram and Dr Rebecca Montacute are available for interview.
- For media enquiries, please contact Communications Manager Richa Kapoor, at [email protected] | 02034 889425
Notes
About the Social Market Foundation: The Social Market Foundation (SMF) is Britain’s leading cross-party think tank. Our mission is to enable markets and government to work together to benefit society.
SMF recommendations, in detail:
- Take social care out of council tax, allowing for major reform of both systems
Council tax and social care reform are both long overdue, but governments of all stripes have failed to grasp the nettle. Both should be tackled head on – and solving them together is more politically effective than attempting to do so separately.
The Government should look at ways to fund old age social care nationally, rather than leaving it to overburdened and financially precarious local authorities. This will inevitably require raising new revenue, and the biggest obstacle remains persuading voters that they should pay more in tax or insurance premiums in exchange for a more generous and effective old age care system. This pill could be considerably sweetened by the promise that council tax will at the same time be cut.
And if the burden of funding old age social care were lifted from local authorities, council tax reform would also be much easier to enact in a world where local authorities need to raise less revenue, rather than more. This would open up the opportunity to make the local government tax system significantly more progressive, with most people paying less, and few people – or even none – paying extra.
- Introduce a ‘Citizen’s Advance’ – the option of a lump sum now in return for postponing your state pension
The “Bank of Mum and Dad” is one of the country’s biggest lenders, exacerbating wealth inequality, while the cost-of-living crisis in pushing people into debt and curtailing their ability to save.
The Social Market Foundation’s ‘Citizens Advance’ would let people choose to receive a lump sum now – £12,548 in line with the full state pension – in exchange for pushing back when they start receiving the state pension by a year. It would only be available to those who had gained 10 years+ of National Insurance credits, placing ‘contribution’ at the heart of the policy.
Our forthcoming research shows how the Advance would be used, from getting onto the property ladder to starting a family and clearing debts. It would be a bold step in demonstrating to younger people – particularly non-graduates who for once would be at the front of the queue – that governments can help them to achieve their goals.
- Set up a Major Projects Office to encourage investment
The last parliamentary session ended on a cliffhanger. Although the Pension Schemes Bill has passed, its ability to mandate pension funds to invest in UK assets has been seriously diluted. While that change is welcome, as it will avoid investors making bad deals to meet arbitrary targets, it does leave the next session with an urgent question – without mandation, how can the Government trigger a new wave of institutional investment in the assets we desperately need?
From roads to rail, energy to water, key British infrastructure is crumbling. But if Government really wants to improve the playing field, look to Canada, where Prime Minister Mark Carney’s Major Projects Office is streamlining institutional investment in strategic priorities without mandation. The Office is designed as a one-stop-shop for institutional finance, and links private capital with civil servants who speak their language. They are prioritising a few dozen investments which are strategic priorities, supporting them through regulatory hurdles and connecting them with the finance they need. The UK needs an alternative to mandation in this coming term, and at the moment pension investors are warning there aren’t enough opportunities in the UK waiting for them to finance. Our own Major Projects Office could fulfil that role.
- Introduce social leasing for Electric Vehicles to protect lower income households from Iran war fuel price spikes
Since the Iran war began 10 weeks ago, the volatility of fossil fuels, and the impact for motorists has become increasingly apparent. For the average British consumer, so far this has been most strongly felt at the pump. In forecourts across the UK the cost of diesel and petrol has climbed dramatically. As of the 6th May, petrol was up 23.6p a litre on last year, while diesel has gone up 48.7p a litre. Transport poverty was a significant issue before this, but higher fuel costs have likely made it worse.
Electric vehicles would help to overcome this have lower running costs and are not as vulnerable to fuel shocks. And while the upfront costs of an EV have come down, they remain largely inaccessible to low-income households. Social leasing however, offers an alternative. Already successful in France, social leasing means households can lease a car from a private leasing company for a (set) monthly fee, and government pays the difference between this fee and the market price. Our 2024 report estimates that providing social leasing for 100,000 EVs, if properly targeted, could bring 500,000 people out of poverty, while simultaneously taking up to 1.5 million tonnes of carbon out of the air.
- Extend the Pupil Premium to post-16 education to help tackle the NEET crisis
In England the main funding mechanism to mitigate disadvantage falls away at precisely the moment it matters most. While Pupil Premium funding helps schools support lower income pupils in younger age groups, this support ends at 16, just as young people face a key transition out of compulsory education. Meanwhile, as of March more than a million young people aged 16-24 are not in employment, education or training (NEET), with those from disadvantaged backgrounds and those with lower levels of qualifications disproportionately affected.
Extending the Pupil Premium into post-16 education would give colleges and sixth forms the resources and incentives to provide the tailored academic and pastoral support disadvantaged students need to stay engaged, to succeed, and to progress. This could fund catch-up provision, careers guidance, mental health support and re-engagement programmes for those at risk of dropping out. We have previously recommended that this be implemented for all post-16 education – including post-18 study – to both ensure sufficient support for disadvantaged pupils and to incentivize institutions to broaden access. Government could pilot this at no cost for care experienced young people, by utilising the Office for Students’ Student Premium fund. Tackling the NEET crisis requires earlier intervention, but it also requires sustained support through key transition points – extending the Pupil Premium is a practical way to deliver this. To do so effectively and in order to rise to the scale of the mounting NEET crisis, Government should also be funding high quality research, such as via the Education Endowment Foundation, on what interventions most effectively increase engagement and attainment at the post-16 level to direct funding.
ENDS