Providers Unite have launched a grassroots campaign to “unite adult care service providers across the country” and are calling on Chancellor Rachel Reeves for an “urgent review of recent Budget measures”.
As of April 2025, employer National Insurance contributions will increase from 13.8% to 15%, with the per-employee threshold at which employers start to pay National Insurance reduced from £9,100 to £5,000 per year. The National Living Wage will increase by 6.7% for employees ages 21 and over, and the National Minimum Wage will rise by 16.3% for 18-20 years olds, and 18% for under-18s and apprentices.
Providers Unite, who bring together more than 125 signatories as a network of care providers serving communities nationwide, representing a “workforce of 1.59 million and a sector contributing £68.1 billion annually to the national economy”, say that “without immediate intervention, Britain faces the systematic collapse of community care services, putting at risk the well-being of an estimated 1.2 million individuals who rely on these essential services.”
The coalition have signed an open letter addressed to Chancellor Rachel Reeves asking for:
An urgent commitment to mitigate the Budget’s damaging impact on specialist care services for people with learning disabilities, and autistic people.
A cross-party collaboration to outline clear, actionable, sustainable plans for the future of the sector.
Combined, the coalition of specialist care organisations:
Support 55,000 people
Employ 130,000 skilled care workers
Operate 7,000 publicly funded care homes
Represent both private and publicly funded services and large and small providers
Given existing social care funding constraints, and warnings from Councils that fund this type of care, there is, the letter says, a shared concern amongst the providers about the impact of the Budget on the vulnerable people they support, as well as ongoing attention paid to only one half of social care provision – elderly care – and not those with profound disabilities in need of lifelong care who are wholly publicly funded and therefore most impacted when public funding is squeezed.
This is the first time a group of Specialist Care providers, spanning an equal mix of both non-profit and independent providers, and large and small operators, have come together to take collective action.
The coalition has been organised by providers themselves for the vulnerable people they support and skilled carers they employ – independent of the sector’s trade bodies.
The letter has also been shared with Darren Jones MP, Chief Secretary to the Treasury, Wes Streeting MP, Secretary of State for Health and Social Care, Stephen Kinnock MP, Minister of State for Care, and Angela Rayner MP, Secretary of State for Housing, Communities and Local Government.
Dear Rachel Reeves,
Budget October 2024 Providers Unite
Across Community Care and Support Services
As providers of vital services to over 1.2 million individuals nationwide and employers of a dedicated 1.59 million workforce, we deliver £68.1 billion in essential community care and support services. We call upon you to recognise our role as an indispensable pillar in Britain’s healthcare infrastructure, standing alongside our NHS colleagues.
We write as a united voice, urging you to consider the profound impact of the proposed tax increases on all those who depend on us. Like GPs, pharmacies and hospices, we are independent businesses and charities embedded in every corner of our communities, committed to supporting citizens with diverse needs. With the state funding more than 70% of our work, we deliver an essential public service.
The current Budget measures risks eroding the foundations of the public services we deliver, which extend far beyond elderly care. They include mental health, domiciliary care, learning disabilities, supported living, and other specialised services. To remain viable, these services require appropriate levels of state funding to meet the varied and growing needs of our communities.
While we acknowledge the government’s responsibility to address the £59 billion public deficit, the new Budget measures threaten to deepen an already critical £8.4 billion funding shortfall in our sector.
Impact of National Living Wage Increase and Employer Costs from April 2025:
Although the increase in the National Living Wage is beneficial for our staff, concurrent Budget changes, specifically the rise in National Insurance contributions and the lowered thresholds are set to drive an unsustainable minimum 9.4% increase in employer costs. For those committed to paying the Real Living Wage and expanding employment opportunities to our future workforce under 21, this impact is projected to soar above 12%. This total far exceeds the £600 million allocated to Local Authorities, the primary commissioners of our services, and who must spread this funding across all their responsibilities under the Care Act 2014. These include support for children’s services as well as financial pressures in other areas including special educational need.
Cost Assessment by the Office for Budget Responsibility (OBR):
According to OBR data, this will cost an estimated £800* per employee.
However, our analysis suggests that the real impact for Employers is underestimated, potentially exceeding projections by over £1 billion.
In summary, this policy risks triggering a cascade of contract surrenders and service reductions, leaving our most overlooked citizens without essential social care and potentially forcing more people onto NHS waiting lists.
We urgently call for an immediate review of these measures and for the establishment of exemptions similar to those granted to the NHS. Alternatively, we ask that the Local Government Finance settlement be urgently adjusted to bridge this funding gap. We welcome the opportunity to consult with you to explore the options.
The alternative is nothing short of a systematic collapse of community care services across Britain.
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