By Professor Martin Green, chief executive of, Care England 

The care sector was a focal point of debate in the recent General Election and there was much expectation the new Government would deliver a better economic settlement for our sector and start to acknowledge its importance to the UK economy.

How wrong we were. Within three weeks, the Government abandoned the social care reform agenda and abolished the workforce development fund. The chancellor then delivered a hammer blow with increases in National Insurance Contributions (NICs).  

These changes, aimed at funding the NHS, will have a huge negative impact on the care sector and could reduce capacity, force redundancies and halt development plans. The chancellor and the Government seem incapable of understanding the interdependence between health and social care. The chancellor gave the NHS an extra £23.5bn, but if social care is destabilised, all this extra money will not have any impact because there will be nowhere except hospitals for people with the most complex needs to go. 

One of the most immediate effects of the NICs increase is the rise in labour costs for care providers, on top of the unfunded increases to the National Minimum Wage. The care sector is predominantly comprised of small and medium-sized enterprises operating on tight margins. With the NICs increase, employers face higher payroll expenses. These are very significant with some providers looking at millions of pounds in extra tax. This places additional strain on already stretched budgets, making it increasingly difficult for care providers to maintain competitive wages. The sector has long been grappling with high turnover rates and recruitment challenges, and the increase in costs will exacerbate these issues. 

Over the years, the funding for care has fallen well behind its true cost and care providers have been subsidising the Government for many years. This has been predominantly paid for by self-funders and this situation can no longer continue. This is, in effect, another tax on self-funders, and frankly, they are increasingly outraged by the fact they pay the true cost of care and the Government refuses to.

With all this extra money going into the NHS, we will be under even more pressure when recruiting staff. The NHS has always had much better terms and conditions funded by the taxpayer that have never been available to social care providers. The irony is that most people who use social care are funded by the Government, which has consistently underfunded our services but expected us to deliver high-quality on completely inadequate resources. The notion of these inadequate resources was clearly seen by the Government's own cost of care exercise, which showed the gap between the true cost of care and local authority commissioning rates. There is not one local authority in the country that is paying the true cost of care.

The chancellor claims she wants economic growth, but the changes she has brought have implications for the broader economic landscape. The care sector plays a vital role in the economy, not just in terms of direct employment but also in supporting families and communities. Increased costs for care services can lead to higher fees for families seeking care for their loved ones. This could result in some families being unable to afford necessary services, potentially leading to increased pressure on informal care networks and the NHS. The impact on families can create a ripple effect, influencing the overall well-being of communities and exacerbating inequalities.

In addressing the challenges posed by NIC changes, the Government and care sector's stakeholders must work collaboratively. Innovative solutions, such as improved training and development for care staff, could help attract and retain talent despite financial pressures. Additionally, a transparent and accountable system for allocating new funds is essential to ensure that the intended benefits reach the services that need them most.

The increased costs pose significant challenges for care providers, potentially affecting workforce stability and the quality of care delivered. To navigate these challenges, a focus on strategic resource allocation, workforce support and innovative solutions will be crucial in ensuring that the care sector can continue to provide essential services to those in need.

There is little wonder that people have no trust in politics because these changes have been ill-conceived, not properly assessed and will have an impact on some of the most vulnerable people in our communities. None of this was discussed during the election campaign when all political parties tried to create the myth they were going to deliver things for the care sector, but unfortunately, the reality, which broken promises have characterised, has proved to be a bitter disappointment for us all.