What the Social Care Reform Means for the Sector

By Jordan Glackin, partner and healthcare specialist at law firm, Shakespeare Martineau (www.shma.co.uk)

The Government has announced that in April 2022, National Insurance Contributions (NIC) will increase by 1.25% in a bid to raise £12 billion to help fund the UK’s health and social care industry. While this much-needed funding could be essential for protecting the future of the healthcare system, clarification is still needed around how this will specifically support social care providers.

The social care sector has been fragile for a number of years, but the Covid-19 pandemic has magnified this further. With an ageing population, the need for social care providers has never been greater. However, as the need for these kinds of services increases, more must be done to support the sector, now and in the future.

One of the main challenges the sector faces is funding. Little financial support is provided by local authorities, and what is available is often not enough to cover the cost of care per resident. To overcome this, care home providers would need to raise their prices, but this presents another problem, as the cost of care is not the only area that needs funding.

The salaries of healthcare staff have been a topic of debate for years. Shifts often include long hours for minimum wage, resulting in significant shortages, as the sector struggles to retain staff. This is further impacted by the end of free movement, which has made accessing the overseas labour considerably more expensive and complicated. There is also the matter of compulsory vaccination requirements, which adds another level of difficulty for those that can’t have the vaccine due to medical conditions or personal beliefs. With the obstacles mounting up, there are concerns that the challenges facing the sector could get significantly worse before they get better.

Initially, the £12 billion ‘booster shot’ of funding will be dedicated to helping the NHS tackle its backlog over a three-year period, including the pandemic. After this, it will be extended to the social care sector, but how much will be invested and what areas it will be invested in, is still to be confirmed. While the funding comes as welcome news for the NHS, there are concerns that it will come too late for the social care sector, as it faces another three years of uncertainty and lack of financial aid.

In the Government’s latest proposals, there is a lifetime cap of £86,000 on an individual’s cost of social care. This figure only covers assistance with daily tasks and not support around food or accommodation, which could prove problematic. If funding is not addressed soon, it is likely that many care operators will shift their focus towards private paying residents, leaving the Government with a shortfall of care providers for those relying on state support.

Further clarification is vital to prevent this. To ensure the areas most in need of the funding injection benefit from the booster, the Government must set out a clear policy structure on how the funds will be accessed and who will be eligible. Consistency and transparency are crucial in this process and beyond, to avoid any pitfalls further down the line.

During the peak of the pandemic, the social care sector was offered support in the form of free PPE, infection prevention and control training and grants, as well as Coronavirus Business Interruption Loans (CBIL). However, these resources are now running low, and the sector must look to the Government for further aid.

While the sector waits, the Government could offer assistance in other areas, such as recruitment, which remains a significant problem. During the Covid-19 outbreak, healthcare staff were pushed to focus on a career in hospitals to relieve some of the pressure, causing further strain for care home providers. However, now things are slowly returning to normal, the Government could play an important role in using its recruitment platforms to fill those much-needed gaps in the sector with nurses, carers and other support staff.

Unfortunately, concerns around wages within the sector are likely to get worse as NIC rise. Many social care providers are already struggling to compete with large employers when it comes to paying staff, and the increases in costs will inadvertently make this more difficult, potentially triggering price increases for residents.

Ultimately, as the ageing population continues to grow, alongside the demand for social care services, action needs to be taken. To ensure the reform works as intended, the Government must clarify that the social care sector will not be forgotten. Although the funding is potentially a good start to protecting the future of the sector, further planning and resources will be required in the years to come.

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