The Care Workers’ Charity (CWC) expresses profound disappointment and concern over the government’s enactment of the National Insurance Contributions (NIC) Bill, a move we deem both irresponsible and short-sighted. This legislation threatens to exacerbate the existing crisis within the social care sector, placing undue strain on care workers and the services they provide.
The NIC Bill introduces a 1.2 percentage point increase in employer National Insurance contributions, raising the rate from 13.8% to 15%. It also lowers the salary threshold at which employers must start paying NICs for their employees, reducing it from £9,100 to £5,000. While the government has allocated £4.5 billion to cover the costs for public sector organisations, private and charity-run healthcare providers are not exempt from this increase. Many other organisations, including those in the social care sector, will also be affected.
This legislative change arrives at a time when the social care sector is already grappling with severe financial challenges, chronic underfunding, and a workforce crisis. The additional financial burden imposed by the NIC increase is expected to have the following detrimental effects:
- Job Losses for Care Workers: The increased NIC rate will put immense financial pressure on care providers, leading to difficult decisions about staffing levels. With costs rising and funding remaining inadequate, care workers are at serious risk of losing their jobs, forcing dedicated professionals out of the sector at a time when they are needed more than ever.
- Impact on Care Workers’ Compensation: With rising operational costs, care providers may struggle to offer competitive wages or necessary pay increases to care workers. This stagnation in wages could further exacerbate workforce shortages, as employees seek better-paying opportunities elsewhere.
- Reduction in Care Quality and Availability: Financial constraints may force providers to cut back on essential services, directly impacting the quality of care received by vulnerable populations.
The House of Lords previously recognised these imminent threats and voted in favour of exempting health and social care providers from the NIC increase. Despite this, the government has proceeded with the legislation without incorporating these critical exemptions, disregarding the well-being of both care workers and people drawing on care.
Karolina Gerlich, CEO of The Care Workers’ Charity, stated: “The government’s decision to pass the NIC Bill without exempting the social care sector is both irresponsible and short-sighted. This policy imposes a substantial financial burden on a sector already in crisis, jeopardising the livelihoods of dedicated care workers and the essential services they provide. We urge the government to reconsider this approach and implement measures that protect and support the social care workforce and the vulnerable individuals they care for.”