In this new series, Clive Parry, ARC England Director, discusses the learning disability funding gap created by changes to the National Living Wage and additional National Insurance Contribution costs.
Before the election, the Institute for Fiscal Studies warned that the books were not balanced and that UK political parties were not honest and transparent with the electorate about the real state of the UK economy. We also knew that when the Autumn 2024 budget, Fixing the Foundations to Deliver Change, was published, it would include some difficult choices, which would mean that things that are already very difficult for some members of our society would get worse.
What we did not expect is that learning disability and autism service providers would be hit with very significant additional costs that they have no means of recovering.
These providers deliver care and support that the state has a duty to provide. They cannot simply increase their prices because they depend on fees paid by councils, 81% of which will overspend on their social care budgets this year. This is irresponsible, and the Chancellor’s decision not to address this in the budget is inconsistent with the Prime Minister’s stated commitment to transparency.
ARC England’s members strongly support increases to the National Living Wage, but they tell us that service development plans, including recruitment into new posts, the planned opening of new services, and improvements to existing provision, are all being shelved as a direct consequence of Rachel Reeves’s failure to make arrangements to ensure that the additional cost burdens she has placed on them will be met through local authority fee uplifts.
We are also hearing from our members about contracts that they will be handing back to councils, packages of care that they are well-placed to provide but will not seek to bid on and other cost-saving measures they are making that will have a detrimental impact on the lives of people with a learning disability and autistic people.
For those unfamiliar with supported living, the wage bill in a typical service can represent over 85% of operating costs. This means that last year’s National Living Wage increase required councils to increase fees in these services by 12%, on top of other inflationary costs.
However, only 12 councils met or exceeded this uplift percentage, and the average uplift (reported through the annual freedom of information request for our Fee Rate Maps) was just 9.7%.
Between April 2021 and April 2025, the National Living Wage will have risen by 37%. This means that for many years, learning disability and autism providers have been trying to close the widening gap between fee rates uplifts they receive and the real inflationary pressures on their operations. To add to this, for 2025-26 they are faced with the prospect of the unfunded additional National Insurance Contribution costs announced by Rachel Reeves in October.
There is a real concern now across the sector that for those who depend on services, the gains that people with a learning disability and autistic people have made in relation to being able to exercise choice and control in their lives, to live as independently as they wish and to be able to live dignified lives that are safe from the risk of harm are coming to an end.
This is not because providers will not do all that they can to continue to support people well and to treat people with respect – they will always do this – but because they simply cannot continue to provide the care and support that the state is required to deliver when the state is not only not prepared to pay reasonable rates for these services but is also unwilling to engage in an honest and authentic discussion about the impact on providers of this disastrous budget.
As part of #ProvidersUnite we are campaigning for meaningful change for the social care sector. Join us and sign the letter to Chancellor Rachel Reeves calling for an immediate adjustment of social care funding to bridge the funding gap.
ARC England is the only membership organisation specifically for learning disability and autism providers. It supports knowledge development, improves practice and influences policy in health and social care for the benefit of people with learning disabilities or other support needs such as autism, mental health problems, and sensory and physical disabilities. Its members support around 100,000 people with learning disabilities and autistic people in England and Wales.
