The BBCA leading charity which supports people with learning disabilities says it could be forced to close at least 60 of its services as a result of rising National Insurance costs.
Mencap is one of a growing number of care organizations that have warned they may have to cut vital services due to the impact on the budget.
Businesses – including charities – currently pay a National Insurance rate of 13.8% on employee earnings above £9,100 a year. But it will rise to 15% in April 2025, instead of when wages reach £5,000.
Mencap says the increase will cost £5.3m per year.
The Government also announced an increase to the national minimum wage during the Budget – with the hourly rate for over-21s going up to £12.21 an hour. It says it will cost the charity a further £6.7m.
The charity estimates the changes will cost up to £18m a year, with minimum wage rises resulting in pay rises for other workers.
Local authorities, which pay for most social care for the elderly and disabled, say the rising costs for the sector are “unsustainable”.
The government says it is tackling the challenges facing adult social care as well as providing it with extra money as part of £3.5bn in extra funding for councils in England next year.
Round the clock support
Twenty-six people with learning disabilities live in Churchfields, Essex. It is one of 600 services run by ManCap in England, Wales and Northern Ireland.
While Churchfields is not at risk, contracts to provide other similar services could be terminated, Mancap says.
Among the residents of Churchfields are Barry and Betty. Both use wheelchairs and require round-the-clock assistance. Betty can speak a few words, but Barry is non-verbal. He often relies on sign language and answers yes/no questions written for him on the whiteboard to communicate.
But with both, their faces and reactions can tell their story more eloquently than words.
Their faces light up when they see each other. Betty lifts Barry’s hand to kiss and they both smile and laugh. The engagement ring is flashing on Betty’s left hand – the staff helped Barry propose to her.
Teeto Adegbenro, one of Barry’s care workers, is passionate about his job.
“The quality of life you give these people is the experience they have in their lives,” he says.
50 staff are needed to support people in Churchfields to lead a fulfilling life. Mencap employs approximately 7,500 staff across its services. Many care workers are underpaid.
The October Budget increased the National Minimum Wage (NMW) – a move that was expected and welcomed by those running care services in a sector where recruitment is difficult.
However, care organizations say the changes to National Insurance Contributions (NICs) will have a major impact – particularly on social care, where many people work part-time and are below the threshold for paying earlier tax. were
Mancap says the increase in NICs will increase its annual costs of employing each staff member by at least £615.
When this is combined with the increase in the minimum wage, the charity will have to find an extra £12m every year.
But if the charity increases everyone’s pay to maintain a pay gap that reflects the level of experience and responsibility, it says the annual extra costs could rise to £18m.
Mencap chief executive Jon Sparks told the BBC it may have to close at least 60 services.
“These are services that provide day-to-day basic social care, support for 200 people with learning disabilities, and services that employ around 400 people,” he says. “These are the services I’m most immediately concerned about.”
He warned: “It could be more.”
Local authorities pay the charity to support people with learning disabilities, so in practice this contract will give back to councils.
Mr Sparks says unless fees are increased substantially he will have to tell councils “we cannot afford to safely run the service on the funding we are getting”.
Similar concerns are widespread in adult social care services. A new report, commissioned by care associations and written by health and care analyst LaingBuisson, says 80-85% of social care in England is provided by small, local organisations, which have very little financial flexibility.
Dr Jane Townson of the Home Care Association, which represents providers who help people in their own homes, is concerned there is a real risk of “significant reductions in care and support services”.
He fears this will leave some people without essential services, and increase pressure on families and the NHS.
“We are at a tipping point and we need urgent government intervention,” she says.
Most social care in England is funded by councils. Care providers estimate that NICs fees for their services will have to rise by 9-10% next year just to meet the rising costs of the national minimum wage.
But local authorities are also under enormous financial pressure. Melanie Williams, president of the Association of Directors of Adult Social Services (ADASS), represents those who run council social care.
She says local authorities are already struggling financially, facing rising costs and increasing demand from people who need more complex care.
“The costs are insurmountable,” she says. “Many of us have overspent on adult social services. It feels like we’re in an impossible situation.”
ADASS calculates that an extra £1.8bn is needed for care services in England.
The government says ensuring a stable economy is one of the cornerstones of its plan for “stability, growth and investment in communities across the UK”.
He says he is tackling the challenges facing social care including improving staff pay and increasing financial support for families with caring responsibilities, adding: “We need to improve adult social care. Addressing the challenges and taking the first step is the National Care Service.”
The spokesman added: “We are giving local authorities an extra £3.5bn in 2025-26, including a £680m increase in social care grants to support the sector.”