Tony Stein, chief executive, Healthcare Management Solutions comments:
“The Chancellor has to intervene in resolving the problem that the government created when it introduced the National Living Wage (NLW).
“The care sector, although not unique in being affected, is peculiar in not having the traditional avenue of being able to set prices to cover rising costs open to it. Approximately 100% of adults with a learning disability, 60% of elderly and physically disabled care home residents, and 50% of those receiving home care are funded by government agencies who also dictate the fee paid. The NHS and Local Authorities are struggling financially and although several LA’s have agreed to increase fees to meet the NLW the reality is that the number of placements will reduce to balance the books.
“There is a pressure on the system and funding needs to be found urgently. I’m hoping that the Chancellor takes the opportunity to look at the VAT treatment of care services. If the government moved the delivery of care home services from an “Exempt status” (so denying operators to recover input tax) to a “zero-rated” status this would allow the recovery of input tax. This would put about 5% directly back to operators to pay for staff cost increases. This in turn takes the pressure off Local Authorities to find the funding and gives them more to spend on increasing the number of clients funded. A win-win.”
Kevin Groombridge, executive chairman, Healthcare Management Solutions:
“I would like the Chancellor to consider, once again, the use of insurance products to fund long term care (LTC). If there was encouragement through the tax system and perhaps some Government support to add to individual pots then people could fund their own care or that of family members in a planned way and not have the worry that the “money will run out”.
“I would like to see an end to the conflict that LA’s have in being commissioners and assessors of care (through so-called “Quality Monitoring”). Quality monitoring should be undertaken by a Registered Inspection Body which is independent and qualified to inspect. This would ensure that public funds were spent properly and release monies to competent operators.
“Finally the LTC sector needs shaking up so that home care, respite care, residential care and hospital interventions work together in a blended approach. If the treasury set up some “demonstration areas”, not under the LA / NHS control, and preferably under a board that has stakeholders from private/ public and charitable sectors monies would be used more effectively and would go further.”