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Impact of the Chancellor of the Exchequer’s Budget 8 July 2015


The Care Association Alliance welcomes much of what Government are doing to create a stable economy that is open for business andFemale Doctor Holding Piggy Bank at the same time deal with the debt. However, we are concerned that the move to a National Living Wage will have a disastrous effect on the social care sector. We should remember that the majority of people receiving social care in England are state funded through  Local Authorities from central Government grant. This is not keeping pace with demand and is also being reduced in real terms. Neither is it ring fenced and consequently is exposed to the LA austerity programme. Thus fees for social care are similarly depressed at a time that central Government is introducing a NLW. For this sector the NLW at the levels proposed are unaffordable unless the grant can be protected and LAs encouraged to pay the actual cost of care. Domiciliary Care Agencies will be particularly affected with people being looked after in their own homes for longer with a conditions and needs ranging from assistance with medication to multiple conditions assessed as substantial and critical.

The recent Department of Health publication supporting the implementation of the Care Act 2014 makes it very clear in its Market Shaping Toolkit that ‘Local Authorities must ensure that the price they negotiate allows the delivery of an effective, feasible and appropriate service supported by appropriate evidence….’.

ADASS and the LGA have made responsible assessments of the developing financial crisis in the sector, now exacerbated by the Chancellor’s budget on NLW. Government have committed £8bn to the NHS, yet Adult Social Care will see a funding gap of £4.3bn by 2020 (ADASS) with no apparent commitment to fill this gap, so we urge Government to reconsider the impact this will have on the care sector before we see some serious consequences for people in care and the Care Providers that support them.



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