The letter reads as follows:
Dear Rachel Reeves,
As providers of vital services to over 1.2 million individuals nationwide and employers of a dedicated 1.59 million workforce, we deliver £68.1 billion in essential community care and support services. We call upon you to recognise our role as an indispensable pillar in Britain's healthcare infrastructure, standing alongside our NHS colleagues.
We write as a united voice, urging you to consider the profound impact of the proposed tax increases on all those who depend on us. Like GPs, pharmacies and hospices, we are independent businesses and charities embedded in every corner of our communities, committed to supporting citizens with diverse needs. With the state funding more than 70% of our work, we deliver an essential public service.
The current Budget measures risks eroding the foundations of the public services we deliver, which extend far beyond elderly care. They include mental health, domiciliary care, learning disabilities, supported living, and other specialised services. To remain viable, these services require appropriate levels of state funding to meet the varied and growing needs of our communities.
While we acknowledge the government’s responsibility to address the £59 billion public deficit, the new Budget measures threaten to deepen an already critical £8.4 billion funding shortfall in our sector.
Impact of National Living Wage Increase and Employer Costs from April 2025:
Although the increase in the National Living Wage is beneficial for our staff, concurrent Budget changes, specifically the rise in National Insurance contributions and the lowered thresholds are set to drive an unsustainable minimum 9.4% increase in employer costs. For those committed to paying the Real Living Wage and expanding employment opportunities to our future workforce under 21, this impact is projected to soar above 12%. This total far exceeds the £600 million allocated to Local Authorities, the primary commissioners of our services, and who must spread this funding across all their responsibilities under the Care Act 2014. These include support for children’s services as well as financial pressures in other areas including special educational need.
Cost Assessment by the Office for Budget Responsibility (OBR):
According to OBR data, this will cost an estimated £800 per employee. However, our analysis suggests that the real impact for Employers is underestimated, potentially exceeding projections by over £1 billion.
In summary, this policy risks triggering a cascade of contract surrenders and service reductions, leaving our most overlooked citizens without essential social care and potentially forcing more people onto NHS waiting lists.
We urgently call for an immediate review of these measures and for the establishment of exemptions similar to those granted to the NHS. Alternatively, we ask that the Local Government Finance settlement be urgently adjusted to bridge this funding gap. We welcome the opportunity to consult with you to explore the options.
The alternative is nothing short of a systematic collapse of community care services across Britain.