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A leading charity that supports people with learning disabilities says it may be forced to stop running at least 60 of its services as a result of increasing National Insurance costs. Mencap is one of a growing number of care organisations warning they will have to axe vital services because of the impact of the Budget. Business – including charities – currently pay a rate of 13.8% National Insurance on employees’ earnings above £9,100 a year. But that will increase to 15% in April 2025, instead starting when wages reach £5,000.
Mencap says the rise will cost it £5.3m every year. The government also announced an increase to the national minimum wage during the Budget – with hourly rates for over-21s set to go up to £12.21 an hour. That will cost the charity a further £6.7m, it says. Combined with having to increase wages for other workers as a result of the minimum wage rise, the charity estimates the changes will cost up to £18m a year.
Local authorities, who pay for most social care for older and disabled people, say the rising costs for the sector are “insurmountable”. The government says it is tackling the challenges facing adult social care, as well as providing it with extra money as part of £3.5bn in additional funding for councils in England next year.
Twenty-six people with a range of learning disabilities live at Churchfields, in Essex. It is one of 600 services run by Mencap across England, Wales and Northern Ireland. While Churchfields is not under threat, contracts to provide other similar services could be ended, Mencap says.
Among the residents at Churchfields are Barry and Betty. Both use wheelchairs and need round-the-clock support. Betty can speak a few words, but Barry is non-verbal. He often relies on sign language and answering yes/no questions written for him on a white board to communicate.
But if the charity increases everyone’s salary to maintain pay differences that reflect levels of experience and responsibility, then it says the annual additional costs could rise to £18m. Mencap’s chief executive, Jon Sparkes, told the BBC it may have to stop running at least 60 services.
“Those are services that provide basic daily social care, support for 200 people with a learning disability, and services that employ about 400 people,” he says. “Those are the services I’m worried about immediately.” He warned: “It could be more.”
Local authorities pay the charity to support people with learning disabilities, so in practice it would be handing contracts back to councils. Mr Sparkes says unless there is a substantial increase in fees they will have to tell councils “we can’t afford to run this service safely on the funding that we’re getting”.
Similar worries are widespread across adult social care services. A new report, commissioned by care associations and written by health and care analysts LaingBuisson, says 80-85% of social care in England is provided by small, local organisations, which have little financial resilience.
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