UK (Parliament Politics Magazine) – Care providers warn of service closures within months due to National Insurance and wage hikes, urging government action to prevent harm to families.
As reported by The Guardian, providers are raising fears that the adult social care sector could face collapse, with the government’s planned surge in national insurance contributions and the national living wage set to come into effect this April.
What did the National Care Association warn about the future of social care?
The NCA, a body representing over 1,000 small and medium-sized care providers, has warned of a potential “seismic change” to the adult social care industry. They raised concerns about the likelihood of service closures due to rising operational costs.
Nadra Ahmed, the NCA’s executive co-chair, stated,
“People may close their services, they may sell up to another provider, they may reduce the number of packages they take.”
She added,
“I suspect that in about six months, we’ll start to see a seismic change.”
Will Lancashire care providers survive NIC rises or close?
In Lancashire, a care provider serving hundreds of users may shut down as increasing NIC costs threaten its financial viability. This could force local authorities to take over services.
What did Leanne Reeder say about social care providers?
Leanne Reeder from Homecare Services stated,
“Our accountants are looking to see how long we can hold on for before we have to say ‘enough’s enough’, and give notice to the local authorities.”
She added,
“There’s only so long you can pay the wages if you’re not getting the funding. The social care sector will break and will maybe sustain for a matter of months before people close down.”
How will NICs and wage increases affect care and transport services?
The increase in NICs could lead private contractors, like care providers, to cut back on their services. This would put additional pressure on local authorities that depend on public services.
Earlier this week, transport providers for SEND students faced service cancellations. Due to rising costs, providers who transport children with special education needs may cancel some routes, affecting access to school.
Thousands of families worry their children could be stranded at home without urgent government action, missing out on education.
In last October’s budget, Chancellor Reeves revealed changes to both the national insurance contributions from employers and a planned hike to the living wage.
The hike in NICs will be 1.2%, and the National Living Wage will increase by 6.7%, from £11.44 to £12.21 an hour.
MPs voted on Wednesday afternoon to deny private hospices, care providers, independent pharmacists, and specialist transport services exemptions from the NIC increase.
What did Ed Davey say about the impact of the tax hike on social care?
Liberal Democrats leader Ed Davey urged the government to “cancel its damaging tax hike”.
He stated,
“This is incredibly worrying for people who need care, and for family carers who inevitably end up filling the gaps. There are already millions of people missing out on the care they need, so the threat of providers closing their doors is the last thing we need.”
Mr Davey added,
“Labour’s jobs tax will be a disaster for social care and the NHS, especially with thousands of people already stuck in hospital beds because the care they need to leave isn’t there.”
What did the government say about the social care funding and plans?
A government spokesperson stated,
“Taking the necessary choices to fix the foundations of the economy at the budget meant we could deliver an extra £26bn for health and social care.”
They added,
“This government inherited a social care system in crisis. We have taken immediate action, including a £3.7bn funding boost, 7,800 new adaptations to help disabled people live independently in their own homes, and we are also introducing the first ever ‘fair pay agreement’ for care professionals.”
Latest care sector vacancy figures
September 2023 saw an 8.4% vacancy rate in the care sector, equating to around 131,000 job openings. The high vacancy rate reveals ongoing workforce challenges in this industry.