THE head of the Dorset Care Homes Association has said a new tax supposed to support the sector could actually undermine care homes, warning smaller providers could go under.

On September 7, the Prime Minister announced plans to provide an additional £12 billion per year for health and social care funded by a new, UK-wide 1.25 per cent Health and Social Care Levy.

The Health and Social Care Levy Bill 2021-22 was introduced on September 8, with the new tax to come into force in April 2022.

However, Anna Knight, who is also care consultant for the Luxurycare Group, which runs five care homes in Bournemouth and Poole, has said the levy could “make things worse” for the sector.

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“It will not fix social care, it isn’t going to improve the fairness – our fear is that it could actually make things worse, for providers, for our staff, and even for the people we care for," she said.

From 2023 it will be a separate tax payable by all working adults, and ring fenced for health and social care.

Bournemouth Echo: Anna Knight, Chair for the Dorset Care Homes Association and Care Consultant for the Luxurycare Group, which runs five care homes in Bournemouth and Poole

But Mrs Knight said the plan failed to address what was happening on the ground, where care places were being purchased by cash-strapped local authorities and clinical commissioning groups at levels which she said failed to reflect the true cost of care.

“With care needs rising, the demands on care homes in terms of staffing levels, staff training and equipment are enormous,” added Mrs Knight.

“It costs a lot to provide high quality, safe care, but at the moment local authorities are telling us they can’t afford it and are constantly negotiating our fees.

“Right now, care homes are on their knees after the past 18 months of Covid, and struggling desperately to attract staff into an already exhausted market with increasing needs. We want to be able to afford to invest more in our staff and reward them accordingly for their skills and commitment.”

In addition, the National Insurance hike, from which NHS providers are exempt but care home employers are not, could leave care homes further out of pocket, as well as impacting directly on the wages of their staff.

Mrs Knight said: “Our wonderful staff, who have given and given and are still giving everything in this pandemic, will actually take-home smaller wages due to the increase in National Insurance, while care homes, unlike our NHS counterparts, will not be exempt from the employer contributions, leaving us less able to boost staff salaries to make up for the tax increase.”

The government has said a portion of the money – £5.4 billion over the next three years initially – will go towards changes to the social care system, including a new cap on care costs in England from October 2023, which will be limited to £86,000 over a person’s lifetime.

Bournemouth Echo: Care home stock image

Here too, Mrs Knight claimed the implications had not been thought through.

“I don’t see that this delivers parity for fee paying clients, and I am deeply concerned that it will not help us as providers, especially with the new National Insurance contributions massively increasing our costs and making our wonderful staff earn less. They are robbing Peter to pay Paul.

“Rather than enhancing them, they are penalising care homes, and I can feel the panic among all of us. We are already seeing smaller providers collapsing and more could follow.

“Our fear is this new levy makes for good headlines, but isn’t the answer we’ve all been hoping for.”

The Echo has contacted the Department of Health and Social Care for comment.