Wes Streeting has said his plan to ban “private equity sharks” from the social care sector was removed from the Labour manifesto, as he accused the government of “overcautiousness” in reforming the industry.

In a Fabian Society report on how to create a national care service, Streeting said overhauling social care was “one of the defining challenges of our age” but an “absence of good political leadership” was holding back change.

“In opposition, social care became a victim of our overcautiousness, which prohibited policy ideas from being floated for fear of what the Tories might say,” he said. “My plan to boot private equity sharks out of social care was cut from the manifesto, as was a proposal for a royal commission. The same culture continued into government.”

The private equity policy was first announced in 2022 and would have banned firms that failed to meet national standards in care, workers’ rights and financial sustainability.

A Labour source said Keir Starmer’s team took the policy out of the manifesto because they were worried it looked “anti-business”.

Streeting said “Downing Street delay” meant the Casey commission, a review into reforming the adult social care sector, would not conclude until 2028 and so major change in the sector before the next general election was unlikely.

“Go on as we are and I predict social care will once again be sacrificed on the altar of an election campaign,” he said. “We must not repeat the mistakes of the past.”

Streeting resigned as health and social care secretary and called on Starmer to resign as prime minister shortly after the May elections. He is expected to run in any imminent leadership contest.

Andy Burnham, who is also expected to run for the leadership if he wins this week’s byelection, said he would fix the social care system “this year” and “wouldn’t flinch from it”, in his first indication of what his priorities would be in office.

It is understood that Streeting would resurrect his plans for regulating private equity in social care in a future government. He also wants to create a social care sponsorship body to remove employers’ power over workers under the current visa model, which leaves workers vulnerable to modern-day slavery.

Other Labour voices in the Fabian Society report who criticised the government over its slow progress in social care reform include Anna Dixon, the Labour MP for Shipley, who said there was a lack of “pace and urgency” on the issue.

“Why is it that the care and support needs of millions of disabled people and older people are so often relegated to the bottom of ministers’ to-do lists?” she asked.

Labour’s 2024 manifesto pledge to “create a national care service underpinned by national standards” was shaped by a previous Fabian Society report that established a roadmap towards achieving this.

Ben Cooper, a research manager at the thinktank and co-author of that report, said: “Labour needs a bold and transformative agenda for the second half of the parliament. Whatever happens with the Labour leadership, the national care service must be the centrepiece of this plan.

“Establishing a service that works for all of us would be one of the most radical, significant and comprehensive changes to care and support in a generation. The time has come to deliver on that manifesto commitment.”

A spokesperson for the Department of Health and Social Care said: “This government is firmly committed to creating a National Care Service, and over the past two years we have begun paving the way.

“We are already improving support for adult social care, including through £4.6bn additional funding for local authorities, introducing a fair pay agreement for care workers, strengthening support for unpaid carers and people with disabilities, and providing £723m to help tens of thousands of people with disabilities adapt their homes.

“Baroness Casey’s first recommendations on delivering a National Care Service will be published later this year, setting out the next steps for a system that is sustainable, joined-up and works better for those who rely on it.”

The Labour party has also been contacted for comment.

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