'Budget may result in care home closures' warns North Yorkshire MD and social care campaigner

Mike Padgham, chair of the Harrogate-based Independent Care Group, which works with local authorities and the NHS in Yorkshire, ensuring that members concerns are heard when negotiating on fees and contract terms, said some of the measures announced by Chancellor Rachel Reeves could have a “devastating impact” on social care providers.

“The bulk of social care delivery, through homecare and residential and nursing care, is delivered by small to medium-sized businesses that are employee heavy,” said Mr Padgham, who is also managing director of St Cecilia’s Care Group which runs five residential and nursing homes in North Yorkshire.

“The lack of understanding of the impact these changes will have on social care providers reveals a total lack of understanding over how social care works.”

In last Wednesday’s Autumn Statement, the Chancellor increased employer’s National Insurance by 1.2% and lowered the threshold at which employers have to pay the tax on a worker’s earnings from £9,100 to £5,000.

Combined with the Government’s decision to raise the National Living Wage and the National Minimum Wage for employees, Mr Padgham says the impact could be severe.

"For a lot of providers this will place existential pressure on them and could well push some out of business," he said.

Mr Padgham estimates the NI changes will cost Saint Cecilia's Care Group an extra £5,000 per month, and the increase in the minimum wage will add £25,000.