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National insurance hike not enough to ‘rescue’ social care, report warns

National insurance hike not enough to ‘rescue’ social care, report warns
£7 billion investment 'just the starting point' to save social care sector

The adult social care sector urgently needs a funding injection both now and in the long term, as current plans do not come ‘close to rescuing the sector’, a report from the Levelling Up committee has warned.

The report found the Government’s 1.25 percentage point National Insurance hike – also called the social care levy – would ‘not touch the sides’ of the sector’s issues, which include a lack of clear long term planning and huge funding gaps.

Further compounding the impact of the withdrawal of funding, the rise in NI – which would raise £36bn over three years, £5.4bn of which is earmarked for social care – has reduced take-home pay for social care workers and ‘could exacerbate retention issues’.

Care England, a representative body for private care providers, estimated that the taxation increase will cost the adult social care sector £600m a year, which they told the committee would be ‘hugely damaging for an already underfunded sector’.

This chronic underfunding is causing massive issues with recruitment and retention in the sector, the committee heard, with a recent survey conducted by Unison revealing that two thirds of their members were ‘actively looking to leave the sector’.

Clive Betts, chair of the levelling up, housing and communities Committee, said the Government ‘deserves credit for attempting reform and for acting to try to prevent the unpredictable and catastrophic costs which can be inflicted upon people for their care’.

But he added: ‘However, the Government should be under no illusions that it has come close to rescuing social care and it needs to be open with the public that there is a long way to go.

‘Ultimately, whether it relates to immediate cost pressures or on wider structural issues in the sector, the fundamental problem is that there continues to be a large funding gap in adult social care which needs filling. Those who need care, their loved ones, and care workers deserve better.

‘The NHS and adult social care provision should not be pit against one another. The two systems are interdependent and each needs to be adequately funded to reduce pressure on the other. Wherever the money comes from—from allocating a higher proportion of levy proceeds to social care, or from central government grants—the Government urgently needs to allocate more funding to adult social care in the order of several billions each year.’

Gavin Edwards, senior national officer for social care, Unison, told the committee that when the Infection Control Fund ended: ‘We were flooded with inquiries from members working in social care saying, “I am going to lose hundreds of pounds a week. I don’t know how I am going to put food on the table.”’

The report added that Covid has placed unprecedented pressures on the social care sector. And that while the introduction of additional funding during the pandemic was welcome, its withdrawal left many uncertain how they would continue to provide services.

It also warned staff are leaving due to offers of higher pay in other sectors, with one respondent pointing out that an Amazon warehouse paid them £2 more an hour and offered a £2,000 welcome bonus compared with ‘pay freezes and below-inflation pay rises on offer in the care sector’

It concludes that the Government must provide multi-year funding and produce a ten-year plan for how it will achieve its vision outlined in the People at the Heart of Care white paper, published in December 2021, in order to help the adult social care sector survive.

This comes after the Health and Social Care Committee warned that the NHS was facing the worst workforce crisis in its history, with low pay and poor pay rises leading the RCN to ballot Agenda for Change nurses on whether to take industrial action. 

There are currently an estimated 105,000 vacancies in the social care sector, a shortfall driven by a lack of opportunities for progression and low pay.

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