Hope has been ignited that the government may scrap a national insurance rise for hospices, care homes and other community health and social care settings.
The House of Lords yesterday voted to amend the National Insurance Contributions (Secondary Class 1 Contributions) Bill.
“For too long, social care has been overlooked”
Martin Green
This bill, introduced after chancellor Rachel Reeves unveiled her 2025-26 budget in October, would increase the amount of national insurance that employers pay on their workers’ wages.
The NHS itself was exempt from the rise, but private and charity-run health and care organisations were not – nor were GP surgeries, which are not directly run by the health service.
Leaders of some charitable organisations that administer health and social care aired their concern that the national insurance hike could exacerbate budget pressures that were already having a profound impact.
Hospices feared the rise would mean further cutbacks in a sector that has already seen beds close and nurses laid off to save money in the last year. Meanwhile, social care leaders feared a total collapse.
The amendment, tabled by Liberal Democrat peer Baroness Barker, adds further exemptions to the national insurance contributions bill.
It set out that NHS general practices, NHS-commissioned dentists, NHS-commissioned pharmacists, charitable providers of health and care and hospice care organisations would continue to pay national insurance at the current rate.
Baroness Barker described Ms Reeves’ national insurance hike a “very crude fiscal measure”, and that she felt there were better ways to fund health and social care than taxing the sector itself.
During Tuesday’s debate in parliament, Lord Howard of Lympne, a Conservative peer and vice-president of Hospice UK’s board of trustees, said the additional contributions would create an estimated extra £34m per year in costs for hospices.,
As an example of the impact on individual hospices, he noted that St Christopher’s Hospice in South London would have to pay £450,000 extra a year, the equivalent of nine specialist nurses.
“The government’s recent announcement that £100m would be made available to hospices… is indeed welcome,” he added.
“But that money is for capital projects. Not a penny of it is available to defray the extra costs of the increase in national insurance contributions, which we are debating today, so it will have little or no effect on the crisis in hospice care that I have described.”
In response to criticism from across the house, Labour peer and financial secretary to the treasury Lord Livermore claimed the NHS would receive an additional £22.6bn due to his party’s budgetary measures, which included the national insurance hike.
“Primary care providers, general practice, dentistry, pharmacy and eyecare are important independent contractors who provide nearly £20bn-worth of NHS services,” he said.
“Every year, the government consult with these primary care sectors about what services they provide and what money they are entitled to in return under their contract; this continues to be the case this year.”
The peer added: “Regarding social care, the government have provided a real-terms increase in core local government spending power of 3.5% in 2025-26, including £880m of new grant funding provided to social care.
“This funding can be used to address the range of pressures facing the adult social care sector.”
Baroness Barker’s amendment was passed with 305 votes for, and 175 against. It must now be approved by MPs in the House of Commons to be included in the final bill.
Some leading figures from the social care and charitable health sectors aired their relief following the vote.
Professor Martin Green, chief executive of Care England, said it was a “huge moment” for social care.
“For too long, social care has been overlooked, but yesterday’s vote proves that when we come together, our voices can no longer be ignored,” he added.
“This exemption would be a vital lifeline for thousands of providers already on the brink, and will recognise the essential role social care plays in our society.”
He called on MPs to uphold the amendment when the bill returns to the Commons.
A spokesperson for Hospice UK added: “Hospice UK welcomes the recognition by parliamentarians of the significant financial challenges hospices are facing.
“We are working with the government to distribute the recently announced short-term funding to our members, and look forward to continuing to work on long-term reform to secure the future sustainability of hospice care.”
