AUTUMN BUDGET 2024: Key takeaways and responses relating to health, social care and businesses
The Chancellor of the Exchequer Rachel Reeves has today 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.
An additional £22.6 billion was confirmed for day-to-day spending over two years for the Department of Health and Social care, supporting the NHS to deliver an extra 40,000 elective appointments per week, delivering on one of the Government’s first aims in office to reduce waiting times in the NHS.
The UK Government stated that it is investing around £1.5 billion capital funding for new surgical hubs, diagnostic scanners and new beds across the NHS estate to create more treatment space in emergency departments, reduce waiting times and help shift more care into the community.
With an overall goal of transforming the NHS, the government will also publish a 10-year NHS plan in spring 2025. This plan will set out reforms transform the NHS from analogue to digital and more from model of sickness to prevention shift care from hospital to community.
Additionally, Rachel Reeves announced £600 million of new grant funding to support social care. This is alongside an £86 million increase to the Disabled Facilities Grant (DFG) to support 7,800 more adaptations to homes for those with social care needs to reduce hospitalisations and prolong independence.
The Chancellor says that she made the decision to protect working people from being dragged into higher tax brackets by confirming that Income Tax and National Insurance Contributions thresholds will be unfrozen from 2028-29 onwards. The rate of employer National Insurance, however, will increase by 1.2 percentage points, to 15 per cent from 6 April 2025.
In addition, the threshold at which businesses start paying National Insurance on a worker’s earnings will be lowered from £9,100 to £5,000.
The smallest businesses will be protected from this change, as the Employment Allowance will increase to £10,500 from £5,000 and be extended to all eligible employers by removing the £100,000 cap, allowing firms to employ up to four National Living Wage workers full time without paying employer National Insurance on their wages.
The weekly earnings limit for Carer’s Allowance will be increased to 16 hours at the National Living Wage, worth an additional £45 a week from April next year, making over 60,000 carers eligible for support, and helping carers to balance work and caring responsibilities. A carer will now earn over £10,000 a year whilst receiving the allowance.
To help ensure pensioners are protected in their retirement, the Budget will also confirm a 4.1 per cent increase to the basic and new State Pension as well as the standard minimum guarantee for Pension Credit, from April next year. The Pension Credit Standard Minimum Guarantee will also increase by 4.1 per cent from April 2025.
Rachel Reeves also announced a £1 billion uplift to help support children with special educational needs and disabilities (SEND).
Commenting on the Chancellor’s Budget, David Stockdale, CEO of the British Healthcare Trades Association (BHTA) said: “While we fully welcome additional funding for the NHS, we are deeply concerned about the impact of rising costs on the private sector.
“Many of our members are small and medium enterprises, tied to fixed-price contracts with NHS suppliers, and rising business costs could make them completely unsustainable. Taking on increased National Insurance and the Minimum Wage will be particularly costly without support. In fact, we are already hearing that without support this could ‘decimate’ vital sectors like community equipment.
“Tax increases and other escalating business expenses threaten to offset any additional investment being made by the Government. The hundreds of SME’s that we represent will bear the brunt if this budget despite the fact that we supply the NHS and local authorities with the essential tech and products necessary to deliver timely, effective care. We stand ready and willing to work with the Government to ensure that this investment is not eroded by increased tax burdens on businesses.”
Kathryn Smith, Chief Executive of the Social Care Institute for Excellence (SCIE), commented: “Today’s Budget was delivered against a backdrop of inflation, demographic change, rising workforce costs, increasing demand for care and tightening local authority budgets. These have all added to the existing financial pressures the social care sector faces.
“Whilst the NHS was afforded significant investment, in excess of £25 billion, the social care sector is only due to receive £600 million of new grant funding. Although investment into the sector is welcome, as recognised by the Darzi Review, the sustainability of the NHS is fundamentally interconnected with that of social care. A properly functioning and adequately resourced social care sector is vital to the success of the NHS.
“The increase to the weekly earnings limit for Carer’s Allowance is a positive step towards improving the financial security of carers, particularly women, who form the majority of those in caregiving roles. It also enables greater flexibility for carers to balance work and care responsibilities.“With the 10-Year Health Plan and the Spending Review on the horizon for the Spring, the Government must work with the sector to establish a roadmap for social care reform.”
Dr Rhidian Hughes, Chief Executive of the Voluntary Organisations Disability Group (VODG), which represents over 100 disability charities, commented: “‘While there is welcome investment for SEND, carers, the NHS and local government, including an increase in the Disabled Facilities Grant, today’s budget falls far short of the commitment needed to put social care on a surer footing.
“The government continue to support previously planned cuts to disability benefit and provide lacklustre investment in social care, which will do very little to give third sector providers the long-term stability they need.
“While the commitments to raise National Living Wage and improve workers’ rights are of course welcome, the fact that plans, including a rise in employer National Insurance contributions, remain unfunded, disregards the significant pressures already facing providers. 70 per cent of charities are already under funded for the services they are commissioned to deliver, with the vast majority of costs being staff costs.
‘There must be urgent action taken to address the right of disabled children and adults to access the support they need, in a way and place they choose. The third sector bring tremendous value to society, but the Government’s current approach to social care provision once again leaves invaluable support at significant risk.”
Jody O’Neill, CEO & Co-founder of online care platform Curam, commented that while the Chancellor’s allocation of £600 million to support local authorities with social care was welcome, it felt like “a duct-tape solution to a much bigger, systemic problem.” He added: “The cracks in the social care system run deep, yet the government continues to shy away from a desperately needed reform.”
Jody added that the introduction of tax-deductible care costs could potentially provide immediate relief to families across the UK. “Only the very poorest members of society receive support on social care payments at present and the prospect of a spending cap has been taken off the table.
“Tax deductible care costs are as pragmatic as they are compassionate. By making quality care more financially accessible, we boost the overall wellbeing of the nation. Affordable at-home care shortens hospital stays and reduces unnecessary admissions which reduces strain on the NHS, something that is quite rightly a top priority according to the government.”
Professor Martin Green, OBE, Chief Executive of Care England, commented: “Today’s Budget is a glaring missed opportunity by a government full of promises to make a real difference to adult social care and establish a sustainable funding framework that meets the gravity of our current crisis.
“The government’s £600 million commitment to be shared between adult social care and children’s services is, unfortunately, a drop in the ocean compared to the staggering £2.4 billion in rising costs associated with wage increases and employer national insurance contributions.
“When we see £22.6 billion directed towards the NHS, it’s disheartening that social care once again receives only a fraction of the support it needs, despite its critical role in easing NHS pressures.
“Adult social care is not simply a supplementary service but a core component of our healthcare system enabling timely hospital discharges and ensuring thousands receive safe, dignified care at home or in their communities.
“Social care stands as a solution to many challenges facing the NHS. Yet, this Budget and this government fail to recognise its vital role. Without immediate, adequate funding, the cost of inaction will be devastating; delayed hospital discharges, overstretched providers, and vulnerable people left without the care they desperately need.”
Amy Little, Head of Advocacy at Leonard Cheshire, was disappointed that there was no reference to disabled people in the Chancellor’s Budget speech. Amy commented: “The nearest mention was confirmation of reform and cuts to health and disability benefits, which will leave many disabled people with fear and uncertainty unless further clarity is provided. Part of this government’s job must be rebuilding trust with disabled people.
“Some measures in the Budget will benefit disabled people – such as a new supported employment programme, additional funding to support home adaptations and an extension of the Household Support Fund to assist those struggling with the cost of living.
“But amongst the fanfare of fixing foundations, just £600 million was announced for adult and child social care. Once again social care, which is vital to working-age disabled people as well as older people, was the poor relation – with its additional funding dwarfed by the £22 billion announced for the NHS. This is despite recent promises of a plan for adult social care alongside the NHS 10-year plan. Fixing the NHS requires fixing social care through proper long-term funding and reform.”
She added: “The National Living Wage increase will be welcomed by the social care workforce, with 131,000 vacancies in the sector, but further funding must be forthcoming to pay for it and to support providers to meet additional national insurance contributions. Without adequate government funding, hard-hit local councils will be forced to make further cuts to available provision and more people will go without essential care.”
