National Insurance hikes to create £2bn deficit for care properties

‘Black hole’: Prof Martin Green, head of Care England

The Treasury should exempt social care from the planned rise in National Insurance Contributions or risk creating a £2 billion ‘black hole’ in the sector, the boss of a leading trade body has warned.

Prof Martin Green, head of Care England, said Budget plans to raise employers’ contributions from 13.8 to 15 per cent risked placing social care in ‘financial jeopardy’.

Liberal Democrat leader Ed Davey last week said that as the ‘vast majority’ of the UK’s social care providers were privately owned they would be hit hard by the tax rise, while not benefiting from additional funds earmarked for the NHS and public sector care groups.

Green backed Davey’s claim to exempt the sector, and also called for Ministers to rethink lowering the threshold at which employers pay National Insurance on workers’ salaries. It is set to fall to £5,000 from £9,100 a year from April 2025.

He said the plans, with a 6.7 per cent rise in the National Living Wage, would ‘create a £2 billion financial black hole for care providers to plug’.

‘With local authorities already funding the majority of social care placements,’ he said, ‘the Government has pushed them, and the sector itself, into financial jeopardy.’

The tax rise is set to earn the Treasury £25 billion a year.