Providers to cut care and jobs on back of Budget, finds survey

Providers say they will have to cut jobs and reduce the amount of care they deliver because of the increased costs imposed by the Budget, a survey has found.

Almost two-thirds (64%) of organisations said they would need to make staff redundant, while 57% said they would have to hand care contracts back to councils and NHS commissioners, reported the Care Provider Alliance (CPA).

The CPA – an umbrella body for organisations representing providers – surveyed 1,180 organisations about the impact of the increases to the national living wage (NLW) and employers’ national insurance contributions (NICs) announced in last month’s Budget.

Tax and wage increases

From next April, employers will have to pay NICs at 15% – up from 13.8% – on staff earnings above £5,000 a year, down from £9,100, while the NLW will rise from £11.44 to £12.21.

Think-tank the Nuffield Trust has calculated that the two measures will cost England’s almost 18,000 independent care providers an additional £2.8bn in 2025-26, about £2bn of which would need to be found by councils.

This dwarfs the £600m in additional grant authorities have been promised for social care in 2025-26, which is expected to be available for both children’s and adults’ services.

Providers predict cuts to care and jobs

The CPA found that, without further government assistance:

• 73% would have to refuse new care packages from local authorities or the NHS.
• 57% would hand back existing contracts to local authorities or the NHS.
• 77% would have to draw on reserves.
• 64% would have to make staff redundant.
• 76% of providers would have to cut training and resources for staff.
• 86% would not be able to maintain wage differentials between staff.
• 22% indicated they would have to close their businesses entirely.

Among the 479 home care respondents, 42.9% planned to shorten care visits.

Most (77.6%) of the 628 care home providers who responded said they were planning to reduce or stop planned maintenance, while 79.7% said they would have to halt capital investment.

‘People’s lives will deteriorate’

“Without adequate support, we now know for certain that services will close, care providers will stop delivering public services, and care workers will lose their jobs,” said CPA chair Vic Rayner, who is also the chief executive of the National Care Forum.

“Critically, a huge number of people who rely on care and support will go without or see their lives deteriorate.”