Services for Independent Living are a small charity providing supported living and homecare services. Most of our work is for Herefordshire Council and we do not plan to make a large surplus each year.
The Autumn Budget, announced in October, has significantly increased our costs for the next financial year.
- The Government announced that the National Living Wage will increase by 6.7% from 1st April 2025. We welcome this increase and would love to pass it on to our staff.
- The increases to the Employer National Insurance rates next year will add around £80,000 to our costs. This is a big increase for us to cover. Care providers estimate that the increased Employer National Insurance rates will cost providers over £2 billion next year.
Because most of our work is for the Council we cannot pass these increases on. We are dependent upon the Council increasing their rates for care to cover these costs. We have calculated that we need a 10% increase in the hourly rate to cover the cost increases.
Councils are dependent upon funding from Central Government and the Local Government Funding Settlement does not appear to provide the funding to allow the Council to increase their rates by 10%. The extra funding for councils in the settlement is positive, but local government still faces challenging financial circumstances.
Two thirds of the Council’s funding is from local council tax, and another 20% from business rates. The Government has announced that Council Tax can be increased by 5%, including the social care levy. The Council could hold a referendum to increase council tax by more than 5%. No one has ever won a referendum asking voters to vote to pay more tax.
The remaining funding comes from grants. We welcome the increased grant funding, but it will not be enough to cover the increased costs for care providers. The cost for adult services in the Council budget for this year is £77m – 37% of the total budget. Adult services and children’s services account for nearly 70% of the budget.
The only way the Council can increase it’s rates by the required amount would be to cut costs elsewhere or increase it’s income. Should the Council have to fund the cost of social care by closing libraries, less frequent refuse collections or increasing parking charges?
If the Council cannot increase it’s rates by 10% the only option we will have to balance our books is to reduce the pay increase to our staff for next year. 90% of our costs are wages and we may not be able to match the 6.7% increase in the National Living Wage. This is not a situation we want to be in. We really value our staff who provide wonderful care to older and disabled people within the County. They are not paid enough for what they do and we want to pay them what they deserve for the work they do.
