The \u201ccatastrophic unintended consequences\u201d of the Budget will be a disaster for hospitals in Wales, say social care leaders.<\/p>\n
That was the warning from Care Forum Wales (CFW), which represents more than 400 private and charity social care providers, as it launched a new campaign, Save Social Care, Save the NHS.<\/p>\n
According to CFW, the combination of employers\u2019 National Insurance Contribution (NIC) increases and the rise in the Real Living Wage will lead to a \u00a3150 million black hole in funding in Wales as a whole and a \u00a340 million gap just in North Wales..<\/p>\n
Unless social care received an NHS-style exemption from the increases or emergency financial support, there was a very real danger that care homes and domiciliary care companies will go bust.<\/p>\n
The inevitable result of that would be vulnerable people left high and dry, piling even more pressure on beleaguered hospitals already struggling to cope and create even longer waiting lists.<\/p>\n
CFW Wales chair Mario Kreft MBE has outlined the organisation\u2019s stark warning in a letter to Welsh MPs, Senedd members along with First Minister Eluned Morgan and Health Minister Jeremy Miles.<\/p>\n
A similar letter has gone to Prime Minister Kier Starmer and Chancellor Rachel Reeves.<\/p>\n
The campaign is being supported by the Five Nations Group which represents care organisations from across the UK and Eire.<\/p>\n
They all agree that third sector providers, including charities and hospices, will also be put at risk by the \u201cruinous measures\u201d contained in the Budget.<\/p>\n
In the letter Mr Kreft said: \u201cWe have more than 400 members across the private and third sectors and they have reached out to us in alarm about the measures contained in the Budget.<\/p>\n
\u201cWe have calculated that taken together this would amount to a \u00a3150 million funding gap across the sector Wales without an NHS-style \u201cexemption\u201d or additional financial support.<\/p>\n
\u201cSince 2020, 40 Welsh care homes have closed and if more of them are forced out of business, this will also place an additional burden on our hospitals which are already struggling to cope even before the onslaught of the added winter pressures.<\/p>\n
\u201cWe are therefore urging you to support our campaign: \u201cSave Social Care, Save the NHS\u201d.<\/p>\n
\u201cThe increase in employer National Insurance Contributions (NICs) by 1.2% to 15% and the reduction in the earnings threshold from \u00a39,100 to \u00a35,000 would impose a significant extra costs on providers.<\/p>\n
\u201cIt represents a 37% increase in employer NIC for a member of staff earning \u00a325,000 a year which equates to the Real Living wage.<\/p>\n
\u201cThe combination of changes to NICs and increases in National Minimum and National Living Wages in the UK Budget represents a huge amount of unfunded extra cost that will affect all providers in a sector where staffing costs make up between 65% and 80% of total expenditure.<\/p>\n
\u201cAverage size care homes tell us that they are facing extra costs of tens of thousands of pounds, with larger care homes facing even heftier bills amounting to hundreds of thousands.\u00a0 One of our third sector members has calculated that the changes will cost them over \u00a31 million.<\/p>\n
\u201cThis comes on top of years of underfunding that, combined with the lack of a fair, standardised toolkit for calculating care fees, left the sector in Wales fragile even before the havoc wreaked by the Covid pandemic.<\/p>\n
\u201cSince then, the gap between commissioned fees and the actual cost of care has grown ever wider, with many commissioners failing to follow the principles of\u00a0the Welsh Government\u2019s \u201cLet\u2019s Agree to Agree\u201d guidelines.<\/p>\n
\u201cIn 2024 we have seen commissioners increasingly impose fees based on flawed assessments of the cost of care, or on what they can afford, leading to a postcode lottery in terms of the fees paid by the 29 local authorities and health boards.<\/p>\n
\u201cAt the same time, additional funding to meet Welsh Government\u2019s momentous commitment to pay social care workers the Real Living Wage (RLW) has failed to reach a large number of providers and left them unable to pay without making a loss.\u00a0 As yet we await confirmation that Welsh Government will renew its pledge into 2025.<\/p>\n
\u201cThe respected think tank, the Nuffield Trust, say the measures contained in the UK Budget\u00a0could see \u201cswathes of the social care market collapsing under these extra cost pressures\u201d.<\/p>\n
\u201cThey have warned that many businesses – especially smaller ones – are at risk of going out of business, disrupting or ending vital care for many older and disabled people.<\/p>\n
\u201cAnother concern that\u2019s been flagged up to us by members is the potential impact of the changes in Inheritance Tax on the care home market in view of the large number of family run SMEs and how this could affect continuity in the sector, especially in the rural, Welsh-speaking heartlands of Wales where these businesses enable people to remain in their own communities.<\/p>\n
\u201cTheir assets are not accumulated private wealth, they are working capital assets \u2013 or tools of the trade \u2013 that provide for the continuance of the business and the jobs they provide.<\/p>\n
\u201cThe former First Minister, Mark Drakeford, described social care as the \u2018scaffold that holds up the NHS\u2019 and losing care settings would be a disaster, not just for the vulnerable individuals for whom we care and our dedicated workforce, but also for hospitals across Wales.<\/p>\n
\u201cThe changes, which amount to a tax on care, threaten to become a national emergency which is why our campaign, Save Social Care, Save the NHS.\u201d<\/p>\n
Mr Kreft added: \u201cDuring the Covid pandemic the Welsh Government provided better emergency financial support than any other part of the UK and we need to see a similar level of support to overcome this potential national emergency.<\/p>\n
\u201cLocal authorities and health boards need to be directed to play their part in ensuring this financial support reaches the frontline to ensure this tax on care does not cause a collapse of social care and create a hammer blow for the NHS.\u201d<\/p>\n