5th Nov 2024 - Written by Brunelcare
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Whilst there was good news in the Budget for investment in social housing, the NHS, and other public services, the increases announced to employers’ National Insurance contributions will have a significant impact on Brunelcare.
We estimate that the change will add almost £1 million to our staffing costs, creating significant financial pressures at a time when we and other social care providers are already under intense strain.
Increasing taxes aims to strengthen our public services, which we welcome, however the Budget is largely silent about social care and supported housing – a core pillar of a thriving and supportive society. It is unclear how the additional £25 billion funding for the NHS will relate to social care.
As a charity, we employ 1,100 dedicated staff to provide care, housing, and support to around 2,000 adults across the South West region each week. Staffing is by far our largest cost, and more than three-quarters of our employees work in social care and support roles. Our initial analysis shows that the 1.2% rise in the rate of employer National Insurance Contribution plus the reduction in the threshold, will mean an almost £1 million increase in our costs, which is equivalent to 3.7% of our current gross salaries bill.
In addition, our wage bill will increase by a further £900k from April 2025, as a result of the 5% Real Living Wage rise. Brunelcare first committed to becoming an RLW employer in 2022 and has continued to do so ever since, because we believe championing fair pay for our social care colleagues is the right thing to do and is vital if we want to sustain a viable workforce.
The combined effect of these unfunded measures means that Brunelcare will start the next financial year with a 7.4% increase in our staffing costs. We have already heard that Local Authorities will not be able to increase their funding to support the NI increases as they will only receive a real-term increase in spending power of around 3.2% for its services – well short of the sum needed to meet the increased costs the Budget has imposed on all care providers.
Oona Goldsworthy, Chief Executive of Brunelcare, said: “The lack of funding to support wage increases, in addition to the new financial pressures announced in the Budget, make it increasingly difficult for providers like us to continue our commitment to paying colleagues the Real Living Wage.
“We are urging the Chancellor to review the Budget’s impact on the social care system, especially for charity providers. Either local government must be given sufficient resources to increase fee levels in social care contracts to cover the additional costs created by the Budget’s ‘tough choices,’ or charitable social care and supported housing providers such as Brunelcare should be exempt from the employer National Insurance increase and new thresholds.”