A Budget hammer blow could be the “final straw” for millions who need help from a Cinderella service already on its knees, social care campaigners warn.
The stricken sector – mainly independent businesses commissioned to deliver care packages for the vulnerable – has been drowning under the weight of demand for years.
But moves to increase employer’s by 1.2%, while lowering the threshold at which firms pay tax on employee pay and wage rises could trigger a fall-scale collapse.
The Doomsday prediction comes as record numbers of vulnerable and elderly require round-the-clock support.
The number requiring care, but who go without it, now tops 2 million for the first time.
Mike Padgham, Chair of The Independent Care Group [ICG] which represents providers, said: “The lack of understanding of the impact these cost increases will have on social care providers beggars belief and reveals a total lack of understanding over how social care works.
“The bulk of social care delivery, through home care and residential and nursing care, is delivered by small to medium-sized businesses that are employee-heavy.
“Huge increases in the costs those providers face – through employer’s NI rises and increases in the national living and national minimum wages, without an injection of funding to help them cope – is potentially disastrous.”
Mike Padgham says devastating Budget changes could be the final straw for the battered sector (Image: Mike Padgham)
The increase in NI costs, alongside a rise in the living wage, will add around £14,000 to average monthly wage bills impacting on recruitment and investment.
Unless the Government reverses the decision, or makes more funding available for social care providers, provision will be cut multiplying the number of vulnerable and disabled people who currently cannot get care.
Struggling businesses say they are unable to cut back on staff because minimum levels are dictated by the Care Quality Commission regulator.
Local authorities, many saddled with mounting debts, will refuse to pay hefty care placement cost increases, prompting industry experts to predict staff training will be axed, planned refurbishment work shelved, or providers will simply shut up shop, further exacerbating a care crisis that many say is becoming unmanageable.
Mr Padgham said: “The NHS relies on us, yet no one can see this coming down the road. It beggars belief. Local authorities won’t take on the squeeze and providers can’t absorb much more.
“The Government has to do something and it has to do it quickly, as I am already hearing from providers this might be the last straw.
“They have gone through 30-years of financial cutbacks and seen funding for social care fall while demand for more and more complex care services increases. They cannot take any more.”
Last month’s Budget was a crushing blow to business with hundreds of thousands fearing for survival.
The rise in employers’ NI contributions was a centrepiece of the first Labour Budget 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 from the spring.
The ICG says the triple whammy will have a devastating impact on social care providers, forcing some to cut and run. That would mean a huge loss of capacity while the number of people going without care spikes, heaping further pressure on an already-overrun NHS.
Worryingly, it could also mean thousands of patients would not be able to be discharged from hospitals, further exacerbating a long-standing bed-blocking crisis.
Mr Padgham added: “There is clearly a lack of understanding, at the very highest level of government, about how social care works.
“Most care is provided by independent providers – in the main businesses who are commissioned to deliver care packages for people by local authorities or Integrated Care Boards.
“Those commissioners have not been able to pay a realistic price for care for many years and that has pushed social care deeper and deeper into crisis, to the point where 2 million people can’t get the care they need.
“If you pile more and more financial pressure on those providers without enabling commissioners to pay more for care, the result is inevitable; more providers leaving the sector and a further loss of care provision.
“That will increase the 2 million who can’t get care and also scupper the Government’s plans to reform the NHS. It relies upon adequate provision of social care to meet its promises to move care from hospital to community and from sickness to prevention.
“I would urge the Government to visit social care providers to see for themselves the crisis at the coalface – I would be more than happy to welcome the Prime Minister, the Chancellor or Health Secretary here to North Yorkshire to see how hard it is becoming to look after older, disabled and vulnerable adults.”
There are now 132,000 vacancies in the battered social care sector, but experts warn the worst is yet to come.
Experts estimate that by 2040 the number of care staff will need to increase by at least 540,000 to meet the needs of an increasingly elderly population living with more complex needs.
Providers warn they will be unable to absorb increased NI and wage costs without care being affected (Image: Kirsty O’Connor / Treasury)
James Tugendhat, Chief Executive of care home provider HCOne, said said: “Local authorities already pay, by the government’s own numbers, something around 25 per cent below the cost of care, and so if in the end they don’t reflect some of these increased costs and providers can’t reduce their own costs you’ll see capacity become a real challenge just when as a country we need more social care provision, not less.
“Something like 50 per cent of the sector is still individual-owner operators and if they don’t see local authority fee rates go up, then we’ll see those sorts of homes close.”
Tim Davies, chief executive of ivolve Group, which provides social care for 1,100 adults, said: “It’s disappointing the Government has again prioritised the NHS and left social care with this period of huge uncertainty.”
Dr Vicky Price, president-elect of the Society for Acute Medicine, said: “While nationally we talk about the 10-year plan, the stark reality as things stand is that we need a 10-day plan to begin to fix things.
“Instead of looking at ways to penalise and shame struggling hospitals, we call on the Government to look urgently at social care provision and delayed discharges of medically-fit patients which is the root cause of many hospitals’ issues yet remains the elephant in the room when it comes to the NHS.”
Siva Anandaciva, chief analyst at The King’s Fund think tank, said: “The NHS waiting list for routine care stands at 7.6 million made up of 6.3 million individuals. Over 12,000 patients a day remain in hospital despite being well enough to be discharged and separate evidence shows the adult social care sector is under increasing financial strain, impacting the vital care they provide.”