A leader has warned that care homes will close as a result of the hike in national insurance announced by chancellor Rachel Reeves in her Autumn Budget.
The chancellor raised NI to 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100, to generate an additional £25bn a year.
Robert Kilgour, executive chairman of Renaissance Care, told Healthcare Management (HM) the Budget was a ‘betrayal of social care’ with the ‘double whammy’ of higher employers NI and its lower salary threshold.
Kilgour said care homes would close as a result of the Budget with vulnerable elderly made homeless.
While the NHS received an extra £22.6bn and a £3.1bn increase in its capital budget, social care leaders warned yesterday the £600m given to support local authorities would fail to cover the costs generated by the NI hike and rise in National Living Wage.
Liberal Democrat leader, Ed Davey, echoed the call for social care to be exempt from the NI hike, commenting: ‘Hammering small businesses with a tax hike is the wrong choice. It will hit people's wages and jobs, but it also risks worsening the NHS crisis by hiking costs for care providers and pushing some to the brink.
‘It just shows that yet again the Government seems to have forgotten about care. At the very least, the chancellor should be exempting social care from this costly jobs tax.’
This article first appeared on Healthcare Management.
