Scottish Care expresses its deep disappointment and frustration at the glaring omission of clear and targeted support for social care in the Scottish Budget. Despite record investment headlines, this budget has failed to address the urgent sustainability challenges facing the social care sector.

While the Scottish Government has pledged £21 billion for health and social care, the lack of ring-fenced funding for social care services and their workforce highlights a disconnect from the real needs of the sector. Social care providers are already at breaking point, grappling with rising costs, including the significant burden of National Insurance increases, which remain unaddressed. These additional financial pressures will force many care providers to reduce services or close altogether, leaving vulnerable individuals without essential care.

Without a robust and sustainable social care sector, the pressure on the NHS and other services will only escalate. The lack of specific detail and ringfenced funding leads us to conclude that this yet more resource for the NHS without a clear prioritising of funding for social care and its workforce.

The Budget commits to £125 million for delivering the Real Living Wage for social care workers by April 2025. Whilst welcome, this is just one element in meeting the true cost of care. Measures to further progress ethical commissioning, recognise pay differentials and address significant funding shortfalls, alongside urgent relief to mitigate the impact of National Insurance increases on social care employers, are essential to securing the future of the sector. Yet, they remain conspicuously absent from this budget.

The omission is not just a policy failure; it is a profound injustice to the thousands of carers, care providers, and individuals who rely on social care every day. Scottish Care calls on the Scottish Government to urgently revisit its priorities, provide the necessary funding and structural reforms, and take immediate steps to alleviate the damaging impact of rising employer costs. The time for action is now.

Dr Donald Macaskill said:

“This Scottish Budget is even more disappointing than we feared it would be. Scottish Care called for a budget that cares. This is a budget that kills. It will kill any reassurance that the Scottish Government truly values social care, and it will kill essential community services which are forced to close and leave workers without employment. But ultimately, it will kill people. People are dying because they can’t get the social care they need. I hear of services that will need to close and make staff redundant by next week.  This is not good enough.

“The Cabinet Secretary for Finance in Parliament this afternoon said that social care funding is absolutely vital if we are going to tackle delayed discharge and look at the system as a whole across the NHS and social care. Yet this budget represents a continued absolute obsessional focus on the NHS that completely fails to learn the basic lesson that if social care is not able to continue, the NHS and all its targets and priorities are going to fail too. Focus on pay for social care workers becomes meaningless if there is not a sustainable sector for them to work in. The Government needs to listen to the sector and act now.”

Ends

IMPACT OF UK BUDGET NATIONAL INSURANCE ANNOUNCEMENTS ON SOCIAL CARE EMPLOYERS IN SCOTLAND

The 2024 UK Autumn Budget announced on 30 October by Chancellor Rachel Reeves includes a 1.2% increase in employer National Insurance contributions, bringing the rate to 15%. The threshold at which employers start paying National Insurance will also be reduced from £9,100 to £5,000 per employee. This is likely to increase costs for all businesses, but especially social care providers whose staffing costs are usually between 80-90% of overall costs. The National Insurance change applies to all employers in Scotland.

A survey conducted by Scottish Care between 5-14 November 2024 of its members found that:

• The average wage cost increase as a result of the changes across respondents was 4.67%.
• The average increase to employer NI contributions was 39.54%.
• Respondents noted a cost of between £19,800 and £15,500,000 per social care employer as a result of the National Insurance changes, dependent on the size of organisation and number of employees.
• 97.83% of respondents said these changes make their organisation less sustainable.
• Of those who responded, nearly half (48%) note the very real possibility of service closure as a result of this increase.

Quotes from survey respondents:

“If our home was full but with only Local Authority residents, we would quickly go out of business.” (very small care home employer)

“We will be forced to take on more privately funded care and potentially reduce our service to the council.” (small care at home employer)

“If this increase in costs are not funded not only will homes have to close the facilities will be unsaleable as they are specialised. The organisations will suffer a massive loss on their asset. Employees will be forced to leave the sector.” (very small care home employer)

“The company (and all services) will face immediate closure as soon as NIC and NMW take place without significant additional support.” (small care at home employer)

“I am considering closing my business across 5 councils” (small care at home employer)”

Scottish Care’s analysis

The failure to recognise and account for the impacts of these changes on social care organisations raises further concerns about the lack of value placed on social care and awareness of the perilous sustainability of the sector.

The changes to National Insurance rates and thresholds announced in the UK Budget will create additional financial burdens on independent care providers and further strain already tight operating margins.

Alongside the changes in the National Minimum Wage, these increases are going to have a huge impact on the ability of social care services to remain sustainable and to survive.
NHS services are to be exempt but care homes, hospices and GPs are going to fall foul of this increase, which is wholly inequitable.

The affordability of National Insurance increases in the social care sector must be recognised and the sector exempted, or significant increased funding ringfenced to support its implementation.

The Scottish Government will announce its own Budget setting out its tax and spend plans on 4 December 2024. It must address these impacts in its plans in order to support social care employers, employees and those who rely on support.

Dr Donald Macaskill, CEO of Scottish Care, said:

“These additional pressures on social care providers created by the UK Budget announcement are unworkable in the current climate and a solution, either through exemption or funding, must be found in order for the social care sector to be sustained. Scottish Care is incredibly alarmed at the figures presented in our survey, not least around service closures, with many providers indicating that this may very well be the straw that breaks the camel’s back. It is no exaggeration to say we will lose swathes of social care provision in Scotland unless urgent, practical and resource-based solutions are progressed for the sector. If not, the impact on individuals, communities and public services will be catastrophic.”

The survey and its findings will be discussed further at Scottish Care’s National Care Home Conference tomorrow (Fri 15 November) in Glasgow, which will bring together care home providers, staff and stakeholder from across Scotland. The Conference will also be attended by the Cabinet Secretary for Health and Social Care as well as health & social care spokespeople from opposition parties, where the topic of National Insurance impacts will be addressed as part of a ‘Fireside Chat’ session. Dr Donald Macaskill and deputy CEO Karen Hedge will also give an address, sharing the survey findings and outlining the critical issues facing the care home sector.

Scottish Care has released a summary of the 2024 Autumn Budget and its implications for social care providers. Announced on 30 October, the budget brings changes that could impact costs and funding for Scotland’s social care sector.

Scottish Care calls on the Scottish Government to prioritise social care funding and partner with the sector to address these budget impacts, ensuring sustainability for employers, staff, and individuals who access care and support.

Read the Briefing Paper here