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Concerns for social care funding following Government U-turn on taxes

The boss of Shropshire’s largest not-for-profit care provider has raised concerns about the future funding of social care following the government’s U-turn on National Insurance payments and scrapping of the social care levy.

The government announced today (Sep 23) as part of the Chancellor’s mini budget that it would be reversing the 1.25 percentage point increase in National Insurance (NI) from November to support people with the rising cost of household bills.

The increase, which came into effect in April this year, was meant to support the NHS and social care sector by raising billions of pounds and would have been replaced by the new Health and Social Care Levy from April 2023.

The treasury has now axed the planned levy saying the change would save nearly 28 million people hundreds of pounds a year.

Debbie Price, Chief Executive of Coverage Care Services, said the U-turn now cast doubt on the future funding of social care.

She said: “We are all struggling and whilst the Chancellor is right to look for ways to boost the economy and seek measures to ease the financial burden facing businesses, families and individuals the decision casts doubt on how the government expects to tackle the growing pressures being faced by the NHS and social care.

“It was predicted that the new 1.25p in the pound National Insurance increase would raise an additional £12billion a year. The government had promised that this money would go towards supporting the NHS and then a proportion to helping the social care sector which is currently facing huge demands.

“It has now said funding for health and social care will be maintained and come from general taxation but, as always, there is little detail, which causes concern. We need to know how the government plans to protect this funding and we urge them to address this issue immediately.

“The system is under a considerable amount of pressure to provide quality care to our ageing population. We are still facing many challenges as a result of the pandemic and coupled with recruitment issues, staff shortages nationally and already tightened government spending, this latest decision is another major blow to all care providers.”

Coverage Care Services is Shropshire’s largest independent care provider operating 12 homes across the county.

Earlier this week it announced a second pay increase for staff taking total investment into the company’s wage bill to £2.5million in 2022.

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