Sector will have extra £2.8bn cost burden from April due to tax and wage rises announced in budget, says Nuffield TrustLarge parts of England’s adult social care market face collapse as a result of tax and wage rises announced in the budget, with devastating consequences for vulnerable and older people who rely on care services, a leading thinktank has warned.
The Nuffield Trust calculates the cost to England’s 18,000 care providers of changes to NIC and national living wage rises will more than wipe out the extra £600m allocated to care in last month’s budget. Other care providers may be forced out of business, it added. “Without additional funding from central government, the combined financial impact of the NIC rise and the new minimum wage level might see not just single providers going out of business but large swathes of the market collapsing.”
Natasha Curry, the deputy director of policy at the Nuffield Trust, said: “Faced with a series of financial black holes in almost every corner of the public sector, the government faced the unenviable task of urgently raising funds at the budget to plug them. But by choosing not to provide support to adult social care providers in covering the costs of the rise in NICs, the result is likely to be catastrophic.