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• Government announces £12 billion per year for health and social care, funded by 1.25 per cent rise in NIC Levy
• The rise in tax comes amid growing price pressures on providers of essential healthcare and assistive technologies equipment and services, fuelled by continuing COVID-19 disruption and multiple supply chain challenges
• Action to improve the health and social care of the nation is welcome, but BHTA stresses a need for clarity on how funding will help consumers and providers of vital equipment and services
[Sept, 2021. London, UK] The British Healthcare Trades Association (BHTA)’s Chairman, Andrew Stevenson, notes that action to support the health and social care sector is welcome, but clarity is needed on how funding will positively impact consumers, patients, and providers of vital equipment and services.
It follows the introduction of the Health and Social Care Levy Bill, which will be funded by a UK-wide, 1.25 per cent increase in National Insurance Contributions, starting from April 2022. The tax is expected to raise approximately £12 billion to be injected into the health and social care system.
Additionally, there will also be a cap on social care costs, with a commitment that no one in England will now have to pay more than £86,000 in care costs over the course of their lifetime.
The announcement of the increase to NIC for providers of healthcare and assistive technologies equipment and services comes amid significant supply chain challenges for many, resulting in substantial price rises.
Andrew Stevenson, Chairman of the British Healthcare Trades Association:
“Any new funding is a welcome step in the right direction to address patient backlogs in the NHS, and to start to improve the position for social care. It remains to be seen, however, just how much of the income generated by the Government’s plan will be spent on social care, and what will be the net effects on the provision of social care products and services – for both consumers and providers.
“If all goes according to plan, 20 per cent of the new funding (£1.8bn/year) is earmarked for social care. While positive, this is far below the estimated £9.3bn/year required to maintain current levels of social care provision according to The Health Foundation, let alone provide for much-needed improvements. And there is reasonable anxiety that ever-growing NHS budgets could further reduce even the planned 20 per cent spend on social care: analysis from the Institute for Fiscal Studies shows that only twice in the last 40 years has NHS spend fallen at or below planned targets – in every other year, NHS spend increased. Indeed, in the words of the Resolution Foundation, “while billed as a social care announcement, in reality, social care played a minor role in a major tax-rise-funded increase in wider health funding, covering the NHS but also meeting ongoing pandemic costs.”
“BHTA and its members welcome any increase in money and resource for the NHS, particularly if it helps the NHS adopt innovative products and services, build resilient supply chains, and drive sustainability and net-zero goals. But – in the words of Conservative MP Anne-Marie Morris – “help for social care is needed now, not in three or four years’ time,” and the plan offers little clarity on how:
• Even with the £86k spending cap, consumers of social care products and services with modest homes and few financial assets can avoid the need to put a charge on their homes if they need significant in-home or residential care (especially since the cap excludes food and accommodation);
• Providers of social care products and services – already facing severe staff shortages; payroll pressures set to worsen as the furlough scheme ends in Sep-21; and skyrocketing 2021 shipping prices through spring, summer and into autumn – might cope with increased payroll costs associated with employers’ NIC rises (from which the NHS, the UK’s largest employer, is exempt);
“Although the relative focus on the NHS over social care means that the focus of what has been announced is on changing who pays for care, BHTA and its members remain committed to everyone having access to the best care so they can live healthier and more independent lives.”
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About the BHTA: Representing over 400 companies in the healthcare and assistive technology industry, the British Healthcare Trades Association (BHTA) brings the industry together to help shape and improve the health and care of the nation. All BHTA members are committed to adhering to the Association’s Code of Practice – the only code in the industry approved by The Chartered Trading Standards Institute. https://www.bhta.com/what-we-do/
About the CTSI: The BHTA Code of Practice – the first for consumers in the healthcare industry – is approved under the Chartered Trading Standards Institute (CTSI)’s Consumer Codes Approval Scheme, ensuring all BHTA member companies trade ethically and professionally.
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