ADASS says UK Government’s Budget decision puts social care under greater financial pressure
The Government’s Budget decision to increase employer National Insurance Contributions (NICs) will have “catastrophic consequences for millions of people drawing on care and support” warns Melanie Williams, President of the Association of Directors of Adult Social Services (ADASS).
Upon opening the National Children and Adult Services Conference in Liverpool last week, Melanie said the decision will place adult social care under “even greater financial pressure, which will be insurmountable for some care providers, who people rely on for everyday basic needs like washing and dressing.”
It’s likely some councils will have to consider further rationing care and support, focusing on those people with the greatest needs, says ADASS. People waiting for care are likely to face further delays, risking their health deteriorating further and those paying for their own care may be forced to cut back on support due to increasing costs, making their lives more difficult.
Some care providers say they will stop providing care in certain areas or stop operating completely because it’s no longer cost effective, reducing care available for people.
Adding her voice to growing calls for an exemption for social care providers to the NICs increase, Melanie argues that £600m additional funding being announced in the Budget for adult social care won’t cover the significantly higher operating costs.
The costs that care providers will now face as a result of increases in both NICs and the National Living Wage which in turn will impact on the fees councils pay to care providers, which ADASS can today reveal could cost up to £1.8bn.
While councils’ direct employees and the NHS will be exempt from the increases, social care providers including voluntary, community, faith and social enterprises which provide the vast majority of care they commission, will not.
These costs will be passed on to councils which will force them to continue to overspend on adult social care budgets. Even before the budget, 81 per cent of councils overspent on adult social care by half a billion pounds last year, which is now set to increase.
ADASS is calling on the Government to counter the impact of the NI employer increases on the social care sector. Options being discussed within the sector include delaying the implementation of the increases, lowering the rates, exempting providers or paying councils compensation.
Responding to analysis by the Association of Directors of Adult Social Services, Councillor David Fothergill, social care spokesperson for the Local Government Association (LGA) said: “Councils are facing unprecedented financial challenges, with the increases to employer National Insurance Contributions likely to add significant costs for councils and the wider sector. These pressures, compounded by inflation, demography and National Living Wage rises, are putting vital services at significant risk of collapse.
“Adult social care, which supports millions of people to live with dignity, is particularly exposed, with rising costs threatening provider failures, longer waits for care, and growing unmet needs. Councils are reporting the likelihood of further cuts to core services and severe strain on health and care systems, including redundancies and providers handing back contracts.
“The consequences of inaction will be leaving people without the support they need and further embedding a two-tier care system. Immediate Government funding is essential to protect these services and ensure councils can continue to fulfil their vital role in supporting communities.”
Melanie Williams said: “We cannot vision for a tomorrow when the cost of today has become so insurmountable. The budget had catastrophic impacts on the cost of Adult Social Care. Not just for Local Government, but also for out important partners who support people in their neighbourhoods and in our voluntary and community sector.”
ADASS members have been reporting concerns with the NICs increase, namely that the social care providers they work with are worried and it is impacting costs and contract negotiations already. ADASS staff have been sharing the views of its members and concerns with Government.
Melanie also discussed her shared goal with Andy Smith, President of the Association of Directors of Children’s Services (ADCS), to improve support for young people drawing on social care as they become young adults. Acknowledging that ‘at times, it can be tough navigating the system and particularly how challenging it seems to be to enable steps from one stage to another.’
The Chancellor of the Exchequer Rachel Reeves recently delivered a Budget which will raise taxes by £40 billion while promising to boost public investment by over £100 billion over the next five years.
