On the 25 February the House of Lords debated the National Insurance Contributions (Secondary Class 1 Contributions) Bill and a majority supported an amendement bought forward by Baroness Barker to maintain current national insurance levels for health and social care providers, thereby exempting them from the expected increase in April.
Responding to the amendment, Dr Rhidian Hughes, Chief Executive of the Voluntary Organisations Disability Group (VODG) said:
‘On the day thousands of people accessing care and support, families, carers and providers marched in Westminster calling for a solution to the impact of National Insurance hikes on social care, the House of Lords voted in support of an amendment to exempt health and social care organisations from this cost.
‘The strong support from Peers on this matter was extremely welcome. VODG’s earlier independent assessment on the impact of National Insurance changes was very clear on the damaging consequences that will be strongest felt on the lives of disabled people, families and carers.
‘Disabled people with lifelong conditions have very clear legal entitlements to care and support. The vast majority, without their own private assets, rely on local authority and health commissioners to fund the support they need.
'Third sector providers, and others, deliver these services on behalf of the state and are wholly reliant on their funding. Commissioners are already telling providers that they will be unable to meet the increase in costs being brought on by higher wage costs and other inflationary pressures. This situation is pushing disability services to the edge.
‘VODG’s independent analysis of the situation conducted by Cordis Bright found the cost of ENICs to our members to be at least £266m per year for our members alone. This means charities are being expected to find millions of pounds on top of the already significant funding gap between the rates commissioned and the costs of care. The sums simply do not add up.
‘With uplifts failing to keep pace with rising costs, growing demand and the need for services to invest in quality and the workforce, vital care and support is and will continue to be pulled away from disabled people.
‘We are in no doubt that the cost of inaction will be catastrophic for the individuals and communities that rely on social care provision including the inextricable connections these services have to supporting the NHS and wider public health.
‘When the Bill returns to the Commons we urge all MPs to listen to what has been said and to apply the amendments that exempt health and social care organisations from the National Insurance changes, to protect the essential care services in each and every constituency.’
NOTES
- On the 25 February 2025 VODG and members took part in the #ProvidersUnite day of action to raise awareness of the impact of NICs on frontline care and support services.
- VODG commissioned independent analysis by Cordis Bright on the impact of the budget to disability charities, this found that one in three disability charities are poised to hand back local authority contracts unless the impact of NICs and NLW increases are fully funded.
VODG member examples of the impact of unfunded NICs increases on disability charities include:
- A charity supporting people with deafblindness, predicts the NI changes will increase its operating costs by at least £2million a year and jeopardise placements for many disabled people who have lived in their residential settings their whole lives
- A small charity providing vital social care support in England and Wales already spends 83% of its expenditure on staff costs, meaning the substantial increase in its wages bill will need to be balanced by service cuts, ultimately meaning the people who reply on its services will feel the most impact
- A social enterprise supporting people with learning disabilities, young people leaving care and people with dementia, has calculated the reduction in the NI threshold equates to a £615 per person increase in staff costs across its 700 strong team. Coupled with the rise in employer NI contributions the charity is facing a £1.5m shortfall if it receives no uplift in fees
- A Trust which supports adults with learning disabilities in West Sussex has reported it is already handing back contracts to the local authority as it can no longer financially sustain them.