Social care in Wales could collapse as a result of a\u00a0 \u00a3150 million triple whammy in the \u201cruinous\u201d Budget, experts warn.<\/p>\n
Care Forum Wales (CFW) says the controversial measures announced by Chancellor Rachel Reeves pose a \u201cgreater threat than Covid\u201d to the sector and fears care homes and domiciliary care companies will inevitably be forced to close.<\/p>\n
The only way to avert the impending crisis, according to CFW chair Mario Kreft MBE, was for the social care sector to be granted an NHS-style exemption from the increases to employers\u2019 National Insurance contributions as well as support to meet the other additional costs.<\/p>\n
With a 1.2% rise in Employer National Insurance contributions and a cut to the Secondary Threshold to \u00a35,000 alongside the five per cent increase in the Real Living Wage to \u00a312.60,\u00a0 CFW has calculated the sector in Wales faces a \u00a3150 million funding hole to plug. In North Wales that amounts to a gap of \u00a340 million.<\/p>\n
CFW revealed that 40 care homes in Wales had already been forced to close since the onset of the Covid pandemic, at least four of them in North Wales with a combined loss of 163 beds.<\/p>\n
Even before the Budget, specialist business property adviser Christie & Co Wales faced a 10,000 deficit in the number of care home beds Wales needs over the next decade.<\/p>\n
It comes at a time when demand is spiralling upwards, with the over 85 population set to double over the next 20 years.<\/p>\n
The sector in Wales, said Mr Kreft, was made up mainly of smaller, community based care homes and nursing homes and were typically family-run businesses.<\/p>\n
He said: \u201cWithout an exemption from these additional and potentially ruinous costs -whether that comes from the UK Government or extra funding from the Welsh Government \u2013 many care homes and nursing homes and home care companies face a real existential threat.<\/p>\n
\u201cThese measures will see average size care homes facing extra costs of tens of thousands of pounds, with larger care providers facing even heftier bills amounting to hundreds of thousands.<\/p>\n
\u201cThe social\u00a0 care sector already has large wage costs compared to other industries because of the number of workers it needed.<\/p>\n
\u201cTo put it into context, a typical residential home where people don\u2019t need nursing has a wage bill as a proportion to turnover of about 60 per cent.\u00a0 That rises in nursing homes to 65 per and more.<\/p>\n
\u201cFor domiciliary care the percentage of wages to turnover is over 80 per cent.<\/p>\n
\u201cSo when you look at the context of those figures and add it to what we have seen in the Budget, it\u2019s a triple whammy.<\/p>\n
\u201cIn Wales we won the argument that was insufficient and the Welsh Government through their guidance to local authorities and health boards have provided funds for the Real Living Wage to be paid which is currently \u00a312 an hour outside London and is going up to \u00a312.60, a five per cent increase.<\/p>\n
\u201cSo most of the people in our care homes, our care workers, are going to get a five per cent increase in their pay packet while others will eligible for 6.7 per cent increase in the National Living Wages.<\/p>\n
\u201cBut the point is, that is a massive and significant cost on the wage bill.<\/p>\n
\u201cAnd when you add the National Insurance rise, this all amounts to a massive extra cost on the wages bill.<\/p>\n
\u201cOn top of all of that we have the new measures around inheritance tax which is going to be a major threat to the future security of these family businesses which like the farmers are going to find it difficult if not impossible in many cases to pass them down the generations.<\/p>\n
\u201cAdded to that there are realistic fears that this will accelerate the haemorrhage of staff from social care to the NHS.<\/p>\n
\u201cOne way or another, we need to have prompt reassurances that the sector will be reimbursed for these extra costs.<\/p>\n
\u201cThe social care sector is essentially a support service for the NHS and should be given the same exemption from having to pay the extra NI employers\u2019 contribution while the increased costs of the Real Living Wage should be funded by the extra \u00a31.7 billion coming to Wales from the chancellor\u2019s Budget.<\/p>\n
\u201cBasically, if you don\u2019t fix social care, you will never fix the NHS, it\u2019s as simple as that.<\/p>\n
\u201cSocial care is a very cheap way of enabling the NHS, which is a very expensive thing, to run<\/p>\n
\u201cThese care homes are businesses but they are also vital community assets which are fantastic value for money which enable people to remain in their own community.<\/p>\n
\u201cThe Welsh Government\u2019s forward thinking policy of Let\u2019s Agree to Agree dictates that the actual costs of providing social care should be met to the sector is financially viable.<\/p>\n
\u201cWe came out of Covid with 40 fewer care homes and we will potentially lose even more as a result of this ruinous Budget unless the sector gets the supports in deserves and needs.\u201d<\/p>\n
Mr Kreft\u2019s fears over the impact the Budget will have on the social care sector without more funding were echoed by Anglesey care home director Kim Ombler.<\/p>\n
She owns Glan Rhos Care Home at Brynsiencyn with her sister Helen and brother David.<\/p>\n
The home has 52 beds and the family have been running the business for 35 years.<\/p>\n
They have calculated that the Budget is going to cost Glan Rhos an extra \u00a3127,000 a year.<\/p>\n
Kim Ombler believes the sector could collapse without additional support to ensure its survival.<\/p>\n
She said: \u201c<\/strong>We are incredibly worried about changes in the Budget on the crucial services we provide.<\/p>\n \u201cWe care for 52 residents and want to be able to continue to recruit staff and continue providing the best quality care. The Budget makes this extremely difficult.\u201d<\/p>\n