Council and Partners in Care express concerns on potential consequences to care sector, following increase in National Insurance Contribution

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

The council and Partners in Care have highlighted the potentially detrimental impact these changes will have on the recruitment and retention of carers not only within the local adult social care sector but children’s services too.

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

Around 77% of Shropshire Council’s budget is spent on social care across both adults and children. Like with many councils across the UK, the council is under huge financial pressures having to make the most savings of any council in England per person – £191 for each person and says it will not be able to cover the gap.

Most vulnerable will suffer

Councillor Lezley Picton, Leader of Shropshire Council said:

“Whilst we can understand the reasoning behind the increasing 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.”

Rising Costs and their impact

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.”

Potential consequences

Stef Kay continued:

“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&E’s.”

Call to Action

In response to these concerns, Shropshire Council and Partners in Care are urgently lobbying the government for an exemption for those working in the care sector from the upcoming employers National Insurance Contribution increases. They argue that without such an exemption or substantial financial support, the sustainability of local care services will be severely compromised.

Further information

Council financial pressure

The financial pressures on councils across the country are immense and are only getting worse, with many struggling to balance their budgets. Demand for many services, particularly social care, continues to soar.

Challenges unique to Shropshire

In Shropshire, our budget cannot meet demand for many of our services and we cannot continue the way we have in the past. The situation is even more acute for reasons unique to our county.

• 25.7% of Shropshire’s population is aged 65 and over. In England, the average is only 18.6%. By 2043 this gap is forecast to grow.
• We have seen a growth in children looked after. This has increased by more than 80% since 2020.
• Shropshire is the 2nd largest inland county in England and sparsely populated. We have less than one person per hectare compared to a national average of more than 4. Travel and fuel costs make services more expensive to deliver.

Around 77% of our budget is spent on social care. This includes looking after people who are older or have learning difficulties; and looking after children and families, including children in care; safeguarding; fostering; education; and those with special educational needs and disabilities. We expect that figure to increase more as demand for social care continues to grow, meaning there is even less to pay for other services.
Further information on Shropshire Councils financial challenges and how it’s working to become a more sustainable council in the future can be found here: Budget 2024/25 – becoming a financially sustainable council | Shropshire Council

About Shropshire Council:

Shropshire Council provides a wide range of services to support and enhance the lives of residents within the Shropshire area. They are committed to working with local communities to build a thriving, resilient, and sustainable region.

About Partners in Care:

Partners in Care is a not-for-profit organisation established in 2003. It is a care association, the membership organisation representing adult social care providers across Shropshire, Telford & Wrekin who are members of the association, and is the local voice for the independent adult social care sector.