In the shadow of looming tax hikes, the social care sector braces for impact. A chorus of voices rises, demanding change before the system buckles under pressure.
There are fears hundreds of social care providers will be unable to stomach massive tax increases (Image: Getty)
Labour has been urged to “end the misery” of its Budget pummelling of social care and exempt providers from massive tax increases.
A day after the Express revealed the extent to which the battered sector was facing a winter of discontent, MPs are plotting to save those who house and feed the sick and helpless from National Insurance hikes.
The Liberal Democrats have tabled an amendment to the Government’s National Insurance Contributions Bill to exempt health and care providers from the proposed tax raid.
If passed it would protect social care providers, hospices, NHS GPs, dentists and pharmacies from being hit by April’s planned increases.
The move comes after 118 council and care bosses signed a letter demanding recognition that properly funding adult social care is an “investment rather than a cost”.
The letter, orchestrated by the Local Government Association and signed by scores of representatives from organisations including Age UK, Mencap, the British Association of Social Workers, and Autism Alliance UK, gives an unequivocal indication of how Labour’s brutal Budget will send social care into meltdown.
Addressed to the Treasury, it said: “People – those drawing on care and support, those delivering it, and those overseeing its provision – will bear the brunt of these pressures.”
Cash-strapped local authorities, which fund the majority of adult social care, will discover this week how much money they receive in centrally-distributed but taxpayer-funded annual settlements, used to fund services, this week.
Lib Dem Treasury spokeswoman Daisy Cooper said: “The new government’s self-defeating tax rise will only inflict more misery on patients and risks making the crisis in health and care even worse.
“The Chancellor must surely recognise that you cannot fix the economy without fixing our NHS. All this tax hike will do is pile more pressure onto our health and care services which are already on the brink of collapse.
“The Government must urgently rethink this decision, back our amendment to exempt vital health and care providers from this tax hike and focus instead on getting people off waiting lists and back into work, not burdening GPs and care providers with even higher costs.”
Ms Cooper said the NI raid will be catastrophic for struggling social care providers (Image: Getty)
The rise in employers’ NI contributions was a centrepiece of Labour’s first financial statement in 14-years. From April, employers will pay 15 per cent on salaries above £5,000, compared with 13.8 per cent on salaries above £9,100 now. In addition, the National Living Wage will increase to £12.21 an hour, while the National Minimum Wage, for those aged 18-20, will rise to £10 an hour.
October’s Budget has sent businesses panicking at how they will fund employers’ NI hikes and wage increases as record numbers of frail, vulnerable and elderly patients need around-the-clock help – most of them placed by councils with local providers.
It is feared some will be forced to close, creating a huge loss of capacity and heaping further pressure on the overstretched NHS.
One provider employing 167 full-time and 45 part-time staff looking after 137 people in five homes and one day care centre in Yorkshire, said: “The rise next April will mean an extra £14,000 a month, or £168,000 a year on National Insurance Contributions and the National Living Wage a further £22,000 a month or £264,000-a-year, meaning a total extra wage bill of £432,000 a year.”
Mike Padgham, Chair of The Independent Care Group which speaks for providers, said: “Saying the Budget was for working people is nonsense. It will hit those in work hard as Employer NI increases will result in fewer jobs and less take home pay.
“The social care sector has been battered over the last three decades, but in my 35 years’ service, I have never known it so tough.
“Years of broken promises from successive governments, decades of underfunding, higher client acuity and continual staff shortages have taken us to the brink of collapse.
The announcement in October’s Budget will, for many providers including those in the charity sector, be the final blow. It will wipe out much of providers profit or surplus and prevent them from investing in future services. Many of these are locally run and, or, family businesses.
“We support higher pay for staff, but for those delivering care on behalf of the public sector we are worried that local authorities will not be able to fund the increases organisations will need to charge and the extra funding the Government has promised is woefully inadequate.
“What this means is that social care providers will leave the sector, care will be rationed even more and the number of people going without rocket from its current scandalous figure of 2m.”
