Following a rather disappointing Spending Review and Autumn Statement yesterday, please find United Kingdom Homecare Association (UKHCA) response below which makes it clear that even if all local authorities raised their council tax by 2%, this would do little to meet the actual costs of homecare. Within the news release we have put forward some recommendations we feel would contribute to the long term stability of the homecare market.

Spending Review offers minimal reassurance to homecare providers

Despite front loaded funding for the NHS the Government’s Spending Review and Autumn Statement offers little consolation for homecare providers or older and disabled people supported at home.

United Kingdom Homecare Association (UKHCA) is not confident that powers for local authorities to increase council tax by up to 2% to meet the cost of social care are sufficient.

Even if all councils increased council tax by 2%, it would raise less than £500m next year and the homecare sector alone will face a £753m deficit in 2016/17.

If all authorities were to implement this measure, we believe that it will have the least effect in parts of the country where high social deprivation already exists, particularly in the North of England and in the UK’s devolved administrations.

We are concerned that increased funding for the health service will have little impact if social care is not recognised as an equal partner of the NHS, and Government acknowledges that homecare has a vital role to play in supporting people out of hospital and back into their own homes.

Over the last year delayed discharges from hospital due to people awaiting a package of care at home increased rapidly. If the social care sector is not funded adequately this problem will continue and the NHS will struggle as demand driven pressures increase.

Evidence provided to the Treasury by the UKHCA has highlighted the significant risks of planned withdrawal from the market by homecare providers where local authority funding is inadequate (note 1). We fear that these exits which have already started will now accelerate.

While UKHCA has supported the introduction of the National Living Wage, the Treasury does not appear to have acknowledged that additional costs to the wage bill must be funded by local councils, which purchase over 70% of all homecare. In addition, money saved by the delayed implementation of the Care Cap in England should be used for front-line care.

In the light of such a disheartening Spending Review, United Kingdom Homecare Association reiterates earlier suggestions which would make a small contribution to the viability of the homecare market.

1. A change in the VAT status of ‘welfare services’ to ‘zero-rated’ status enabling care providers to reclaim VAT on the costs they incur.

2. Provide tax incentives for private individuals funding their own social care.

3. Make use of existing powers to oversee the adequacy of local authority commissioning, particularly in relation to local market viability and compliance with the Care Act 2015.

4. Align the start dates of the National Minimum Wage and the National Living Wage.

UKHCA‘s Policy Director, Colin Angel, said:

“Regrettably providers will take little comfort from Treasury announcements of £3.5 billion funding for social care through councils choosing to increase council tax or being successful in accessing the Better Care Fund. There has been little evidence of funding making its way to front line services, where employers desperately need to remain financially viable and provide adequate terms and conditions for the social care workforce. Councils (and the people who rely on state-funded social care) now face significantly higher risks of local market failure, even if they use what options are available to them to increase funding for the independent and voluntary sector”