Chancellor Kwasi Kwarteng today confirmed that the National Insurance (NI) rise put in place by his predecessor will be reversed and a planned levy to fund social care will be dropped.
Since April, workers and employers have paid an extra 1.25p in the pound in NI payments to help fund the NHS and social care.
Former Chancellor Rishi Sunak had planned for NI to go back to its old rate next April, to be replaced by a new Health and Social Care Levy at a rate of 1.25%.
Today’s announcement, however, means that NI contributions will be cut from November and the planned Health and Social Care Levy will be cancelled.
The Local Government Association (LGA) today reminded PM Liz Truss that during her leadership campaign she promised that she would find the funding necessary to solve the long-running social care crisis.
The LGA estimated that £13bn is needed to shore up a social care sector that is struggling under multiple pressures, including the challenges of an ageing population and staff recruitment and retention issues.
The association argued that £6bn of this funding is needed immediately to increase care worker pay, meet demography and inflation pressures and stabilise the provider market. The remaining £7bn is required to ensure councils are able to deliver on all of their statutory duties under the Care Act.
In a statement issued before the mini-budget, Cllr David Fothergill, chairman of the LGA’s Community Wellbeing Board, said: ‘The new PM can make a dramatic improvement to the lives of hundreds of thousands of people by delivering on this promise.
‘This injection of funds is exactly what the sector needs to come back fighting fit and ensure it is stable and effective in these turbulent times.
‘Social care’s lack of capacity to deliver the care that people need to live their life is being seen in higher waiting lists and people not getting the care they need, with impacts on the NHS. The Government needs to step in now.
‘If it doesn’t, we can expect one of the most challenging winters in recent times, with severe knock-on effects that will continue to significantly impact on people and their loved ones.’
