From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    National Insurance rise will worsen the care crisis, not fix it! Government must urgently rethink

    National Insurance rise will worsen the care crisis, not fix it! Government must urgently rethink

    Increasing National Insurance will not ‘fix’ social care, it will make things worse.

    Social care has already suffered a triple whammy of official policies since Covid:

    1. Premature hospital discharges during Covid led to deaths for residents and staff
    2. Council funding has not kept up with cost increases facing care homes
    3. Mandatory vaccination has worsened long-standing staff shortages with loss of 40,000.

    … And now National Insurance hikes will be a fourth blow – increasing employment costs, reducing staff pay, aggravating staff shortages and driving more care home closures.

    Not too late to reverse the National Insurance hike: While the Government claims its National Insurance hike aims to solve the social care crisis once and for all, it is actually going to make things worse. It is not too late to reverse this terrible decision and reconsider how best to raise extra funding.

    Social care employers will be hit by higher costs but the money will first go to the NHS, leaving them worse off: Sadly, it seems social care is being treated with disdain, while the NHS remains protected. The money raised will initially help the NHS, while actually penalising social care operators, particularly the smallest ones and charities or not-for-profit operators. The move follows on from a series of official blunders that have weakened the sustainability of the sector.

    Triple whammy for care homes has already caused significant damage: Increasing National Insurance this April is dreadful timing as the sector is struggling with the impacts of three successive damaging blows, caused by policy decisions. This triple whammy was caused firstly by the decision in 2020 to prematurely discharge elderly hospital patients into care homes which were not adequately equipped to protect other residents and staff, causing thousands of deaths. Secondly, despite soaring inflation, councils have not increased the amounts they pay to care home operators to reflect rising care-related costs for publicly-funded residents.  And thirdly, the recent decision to impose mandatory vaccination requirements only on care home staff, but not the NHS, has led to losses of 40,000 desperately needed staff, in a sector that was already chronically short of personnel.

    Government should not add a fourth blow to this already beleaguered sector: On top of this triple whammy, the Government is about to hit the sector with a fourth. Knowingly worsening a staffing and inflation crisis, reducing staff take-home pay and adding to employer costs, seems bound to damage social care, not help it as care homes will suddenly have to find even more money to pay higher National Insurance contributions for their staff.

    Many more care homes are at risk of closure if NI hike goes ahead: It is already being reported that many smaller care homes have had to close and there is clearly a real risk that the increase in National Insurance will be a final straw for many more. As care homes close, their frail, elderly residents will be forced to move elsewhere, posing a real risk to their health and even their life. These are not parcels on a shelf, they are vulnerable people living in what is their home and relying on others to take care of them.

    Social care needs are not being taken seriously enough: All too often, social care seems to be the neglected part of our health system, while the primary focus is on the NHS and this National Insurance hike is another example. Care home operators, their staff and those vulnerable people whose lives depend on them, are treated as of secondary importance, pushed to the bottom of the priority pile.

    This remains the biggest failure of social policy in modern times:  The sector is more at risk now than before the supposed ‘fix’ from higher National Insurance. Claiming to be improving things for the long term while making them even worse in the short term is certainly not a solution.  The fact is, for many elderly or vulnerable people, a lack of adequate social care can be at least as life threatening as poor healthcare.

    Leave a Reply

    Your email address will not be published. Required fields are marked *