Rangeford Blog - CEO Howard Nankivell's view on the recent National Insurance increase

The recent announcement by Boris has been described as ‘risky’, ‘controversial’ and ‘manifesto-shredding’, but it is absolutely essential if we are to rebuild our NHS and boost social care funding post-Covid.

Boris Johnson has announced that there will be a 1.25% National Insurance increase from April 2022 raising £12 billion per year in order to provide much-needed funds for the NHS and social care.

This has triggered ripples of exasperation throughout the media and the working community alike. In particular this announcement breaks the Conservative Manifesto commitment, which once pledged not to raise VAT, National Insurance or income tax. But that was before Covid!

It is fair to say that no tax increase will ever be positively received and that this is, perhaps, a bold and necessary move from the Conservatives. Therefore, it is a time to applaud the government on making such a radically important step to save the NHS in crisis and, focus upon the issues within social care. Social care is an area that has been buckling under the strain of demand for years and one that desperately warrants additional financial support.

Critically the government have made assurances that the money raised will be lawfully ringfenced, to prevent future governments changing where the tax is allocated to. 

Why is an investment needed in social care? 

Boris Johnson stated that social care has been, ‘cruelly exposed by Covid’ and that we are no longer in a position where we can continue avoiding this matter. Unlike the NHS, social care does not have the same financial backing and many people are left to pay extortionate costs to cover their own care, when it is required. Considering that most of us will need social care at one point or another it is fundamental that this is addressed.

Additionally, a combination of an increasingly ageing population, frequent staff turnover and poor communication between social services branches, have brought social care to its knees during the pandemic. 

How will this tax benefit the elderly? 

The new tax will have positive impact on the elderly community. From October 2023, anyone starting care will not have to pay more than £86,000 for their social care.

This enables individuals to retain control of their lifetime earnings and avoid having to liquidise their assets to fund their care. Anyone with assets below £20,000 will not have to pay for their social care. Finally, anyone with savings between £20,000 and £100,000 will make a, yet to be confirmed, contribution.  

Over time, if this money is used effectively, it will enable all elderly individual’s good quality care when they need it.

Understandably, the NHS will receive a significant amount of the healthcare levy.  With an unprecedented backlog of operations and waiting lists, most will agree that this is vitally important to the running of our health system. However, there are concerns that the adult social care sector will, again, be seen as a secondary recipient and as a separate entity, as opposed to part of a wider integrated healthcare system. Joining up the services has long been perceived as a valid solution in improving care. In order to utilise this money then, both the NHS and social care need to work together to achieve permanent change.

The Retirement Community sector has a big part to play in helping our older citizens flourish in later life. The tangible benefits of preventing illness and enhanced mental and physical wellbeing, through integrated care and support have already been witnessed by many, through the last 18 months. Therefore, it is not surprising that interest in the sector has never been higher.

Keeping older people’s policy decisions high on the agenda can only be beneficial and is a timely reminder as the government also launches its Housing with Care Task Force. Our trade body ARCO will be a core part of this and will work tirelessly to ensure that we tackle the obstacles which are holding back the growth in the supply of good quality housing-with-care for older people. This is another vital component of the wider approach to reducing the demands on both the NHS and the adult social care services.

Unfortunately, there will always be some discontent, but it is impossible to deny that social care will affect us all at some point and, without immediate action we will face a national emergency. We hope that this tax levy can be a crucial turning point in navigating through our social care crisis. Let’s just ensure that it is used effectively to transform social care and to introduce an improved, tailored system which will suit every individual.

Blog by: Howard Nankivell, Chief Executive Officer at Rangeford Villages.