'Our most vulnerable will suffer' - Council leader calls for National Insurance contribution exemption for care sector

Shropshire Council, in collaboration with Partners in Care, has expressed significant concerns regarding the recent government announcements on the rise in employers National Insurance contributions to care providers, set to take effect in April 2025.

Council leader, Lezley Picton, has warned that the additional cost would "seriously strain" the council's "already stretched finances" and the "most vulnerable will suffer" as a result. 

Around 77 per cent of Shropshire Council's budget is spent on social care across both adults and children and the authority is currently attempting to deliver the highest percentage savings target of any council in the country.

Both organisations are urging the government to review the effect of the recent Budget on social care and ease the pressure on providers and council finances.

Councillor Picton said: “Whilst we can understand the reasoning behind the increase in employers' NI contributions and fully support the increase to the National Living Wage, the care sector is already under immense pressure, and these additional financial burdens could have a devastating effect on our care organisations, particularly our smaller providers.

“The government must urgently exempt social care providers from the employers' NI contribution increase set out in the Budget. This increase, combined with underfunding and the National Living Wage rise, may force some of our smaller care providers to close and increase provider costs, putting further financial press on the local authority. 

"This would seriously strain our already stretched finances and lead to more tough decisions to ensure our most vulnerable adults receive care. The social care sector is at a breaking point due to funding gaps and rising costs - this could be the last straw that finally breaks the camel’s back, and it will be our most vulnerable that will suffer as a consequence.

“It is therefore crucial that the government provides the necessary support in social care to offset these additional expenses or introduce exemptions to ensure that we can continue to recruit and retain the dedicated carers who are vital to our community’s well-being.”

Stef Kay, chair of Partners in Care’s board of directors, said: “Partners in Care is deeply concerned over the financial impact on the adult social care sector in Shropshire of the announcements made by the government in its autumn budget in October 2024.”

“The increase in the National Living Wage and changes to employers' National Insurance contributions from April 2025 will have a significant financial impact on care providers, the majority of whom are small local companies employing local people, supporting some of the most vulnerable members of our local communities.

“Unless care providers receive an exemption to the employers' National Insurance Contribution changes, or adequate financial support from the government to meet these additional costs, we will almost certainly see care providers having to reduce their staffing levels which will impact on the quality of care they provide, and in the worst case scenario care providers deciding to exit the local market which will reduce the availability of care with knock-on effects on our local healthcare services including our local hospitals and A&Es.”