Insurance hike puts care homes at risk, say firms

Care providers in Sheffield have warned the industry is "in crisis", with increases in National Insurance contributions putting homes at risk of closure.

Sheffield councillors have called on Chancellor Rachel Reeves to exempt care providers from the rise in employers' National Insurance contributions.

These will increase from 13.8% to 15% from April and the pay threshold for contributions will also decrease from £9,100 to £5,000.

Nicola Richards, director of Palms Row Health Care, said the company took the "agonising decision" to shut a 60-bed home during Covid, and the chancellor's plans would see "many more of these vital frontline services going to the wall".

Care providers say they are being "squeezed in the middle" by costs despite a 5.27% increase in the fees the council pays for services.

According to the Local Democracy Reporting Service, Ms Richards said: "The fact is that the social care sector is in crisis.

"A funding cliff edge is looming which if not addressed will force care providers to close and leave thousands of vulnerable people and their families with nowhere to turn.

"We simply cannot let this happen.

"I am calling on everybody in Sheffield who cares about preserving these crucial local services to contact their MP and make their voices heard."

Liberal Democrat, Green Party and independent councillors supported the decision to write to the chancellor at a meeting, but Labour opposed it.

The Sheffield Care Association said after the meeting that it was "incredibly disappointed" some councillors chose not to support local care providers.

It said: "We appreciate that the council has limited budgets and are also limited in their ability to raise further funds.

"If the council's uplift doesn't match costs increased by a combination of inflation and government budget decisions, then we are squeezed in the middle.

"This funding gap will eventually have a negative impact on the quality and safety of care that we can provide.

"If social care is not made an urgent priority then care providers will close down, vulnerable people in Sheffield will no longer have access to the much-needed care services that support them and the NHS will be overwhelmed, putting lives at risk and costing the country billions.

"We also face losing a skilled and dedicated workforce forever."

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