Chancellor Rachel Reeves is facing increasing pressure to exempt the care sector from her April tax raid as a growing coalition of care leaders back a radical plan to rescue their sector from planned NI rises.
Not-for-profit energy consultancy Box Power CIC, which funds several hospices nationwide, are urging the Chancellor to adopt their policy for an alternative funding mechanism which would allow care to be exempt from NI rises, as failure warnings from sector leaders and operators mount.
CEO Corin and COO Tricia Dalby’s policy would see banks keep 1% of their money deposited with the Bank of England in accounts that don’t earn interest. This change could save the UK government about £1.3 billion a year in interest payments (New Economics Foundation).
Box Power would see these savings ringfenced for the care sector, offsetting the costs of planned NI hikes set to come into effect this April.
Numerous care providers and leaders have already lent their support to the new funding plan. Figures include, Dr. Robert Kilgour, Mike Padgham, Tony Stein, Abbey Healthcare, Active Care Group, Aldingbourne Trust, Bloom Care, Borough Care, Cedar Care Homes, Coverage Care Services, Elizabeth Finn homes, Harbour Healthcare, Healthcare Management Solutionsm Independent Care Group, Lukka Homes, Maria Mallaband Care Group, Minster Care Group, Prime Life, Renaissance Care, Roseberry Healthcare, Royal Masonic Benevolent Institution, Salutem Care and Education, St Martins Care, St Philips Care, Vida Healthcare, St Helena’s Hospice, Birmingham Hospice..
The policy move, increasingly gaining traction within the industry and at Westminster, comes as research from the Nuffield Trust indicates planned NI increases could cost adult social care alone over £900 million per annum. A cost few providers can afford without a reduction in their frontline services.
The Care Provider Alliance has found that without additional support, 1 in 5 care providers may shut their doors this year, while 77% will have to dip into their cash reserves just to get by.
Corin Dalby, CEO of Box Power CIC, says:
“In light of the current funding crisis, we’re requesting the Chancellor Rachel Reeves adopt this policy to provide some immediate relief to the care sector. While NHS trusts have been protected from NI rises – their providers in social care and other facilities have been left to fend for themselves.”
Stephen Trowbridge MBE, First City Care Group, adds:
“This is a direct attack on social care—and we will not stay silent. If the government refuses to explore this, they are actively choosing to let the care sector fail.”
Mark Lloyd, Managing Director of RMBI Care Company – which provides elderly residential and nursing care, said:
“Now with an added NI increase, providers are being pushed over the edge. The government must act now.”
Box Power CEO Corin Dalby is urging the Chancellor to adopt their policy. Drawing inspiration from similar moves made the European Central Bank, the policy once replicated in the UK would generate enough government savings to exempt the entire care sector from NI rises without raising taxes or introducing spending cuts.
Corin adds: “This policy isn’t about politics; it’s about people and a sector that’s on its knees. It’s only fair we ask banks to step up when they’re raking in record profits.”
Rachel Reeve’s recent pledges to reduce banking regulation and roll back protections have only continued to fuel concerns. The Chancellor’s removal of “overcooked” regulations like banker fee deferrals, reductions in the City’s reporting burden, and delays to Basel 3.1 has signalled an approval from HMT for big banks to increase their risk taking.
Box Power’s backers such as Mark Jarman-Howe, Chief Executive of St Helena Hospice, has described the situation as dire:
“Hospices are being crippled by rising employment costs. This is a travesty, we need a long-term funding solution, but in the short term, this policy could provide the immediate relief we so desperately need.”
The simplicity of Box Power’s policy to exempt care providers from planned NI increases means it could be implemented tomorrow – with the Chancellor not even requiring a vote in the Commons.
