THE Government must act quickly to axe the National Insurance increase for social care providers or risk a serious increase in the number of people going without the support they need, the Independent Care Group has warned.
The ICG said the Government must either make social care providers exempt from the increase or ring-fence funding to pay for it.
In Wednesday’s Autumn Statement, the Chancellor, Rachel Reeves, increased employer’s National Insurance by 1.2% and lowered the threshold at which employers have to pay the tax on a worker’s earnings, from £9,100 to £5,000. The ICG says that increase, allied to steep rises in wages, could have a devastating impact on social care providers, forcing some to leave the sector. That would increase the number of people going without care, which topped 2m for the first time last month.
ICG Chair Mike Padgham said: “The lack of understanding of the impact these cost increases will have on social care providers beggars belief and reveals a total lack of understanding over how social care works.
“The bulk of social care delivery, through homecare and residential and nursing care, is delivered by small to medium-sized businesses that are employee heavy.
“Huge increases in the costs those providers face – through the employer’s National Insurance rise and increases in the National Living and National Minimum wages, without an injection of funding to help them cope, is potentially disastrous.”
He said the Government either had to make social care providers exempt from the National Insurance increase or ring-fence funding with local authorities, that commission the bulk of care, to pay for the rise.
“The Government has to do something and it has to do it quickly, as I am already hearing from providers that this might be the last straw for some of them,” Mr Padgham added.
“They have gone through 30 years of financial cutbacks and seen funding for social care fall whilst demand for more and more complex care services increases. They cannot take any more.”
In the Autumn Statement the Chancellor increased employer’s National Insurance and also confirmed that the National Living Wage will go up to £12.21 an hour and the National Minimum Wage, for those aged 18 to 20, up to £10 an hour next spring.
Mr Padgham added: “There is clearly a lack of understanding, at the very highest level of government, about how social care works.
“Most care is provided by independent providers – in the main businesses -who are commissioned to deliver care packages for people by local authorities or Integrated Care Boards.
“Those commissioners have not been able to pay a realistic price for care for many years and that has pushed social care deeper and deeper into crisis, to the point where 2m people can’t get the care they need and there are 131,000 vacancies in the sector.
“If you pile more and more financial pressure on those providers – like National Insurance rises and increases in the minimum wage – without enabling commissioners to pay more for care, the result is inevitable; more providers leaving the sector and a further loss of care provision.
“That will increase the 2m who can’t get care and also scupper the Government’s plans to reform the NHS. It relies upon adequate provision of social care to meet its promises to move care from hospital to community and from sickness to prevention.
“We all want to pay our staff better but raising the minimum wage will put more and more pressure on to care providers, unless we get better funding into social care.”