On Wed 11 March, the Chancellor announced a budget with 2 distinct budgets within it; one was an emergency £12bn plan focussed on mitigating the effects of COVID-19 on the economy, while the other was a longer term budget focussed on significant increases in borrowing to enable increased public spending to deliver on the promises made by the Conservatives during the election campaign, including investment in infrastructure, more money for the NHS and schools and an increase in the threshold for paying National Insurance.
The budget also saw the announcement of the Comprehensive Spending Review 2020 (CSR), which will be completed by July and will set out detailed spending plans for public services and investment over the next 3 – 4 years.
COVID-19 Contingency Measures
The budget includes a £12bn package of emergency measures to support businesses and families and the NHS, social care and public services during the virus outbreak. These measures include:
- A £5bn COVID-19 Emergency Response Fund for the NHS & other public services, including social care. Local Authorities will receive some of this money to support social care and vulnerable people.
- Statutory Sick Pay (SSP) will be available from day one for those who are advised to self-isolate, and they will be able obtain a notification via NHS111 which they can use as evidence for absence from work
- For those not eligible for SSP, workers will be supported through an Employment and Support Allowance and/or Universal Credit, paid on day one rather than day eight. Access to Universal Credit advanced payments will be allowed without needing to attend a job centre for people self-isolating.
- SME’s (with up to 250 employees) will be given a reimbursement of up to two weeks of SSP by the government for those self-isolating.
Other measures in this package include a £500m hardship fund for Local Authorities in England to support economically vulnerable people and households, £30m for COVID 19 research and £10m for increasing diagnostic testing and surveillance by PHE.
NCF voice: We have had assurances from the government that the £5bn emergency fund response IS intended to be used to support social care, so do make sure you seek advice from your local commissioners (LA or CCGs) about how this will work. It is vital that this money flows swiftly and in a targeted way to support the care services that need it most, including those care providers who do not have contracts with Local Authorities, to make sure that the most vulnerable people on our country continue to be supported and kept safe
Similarly, while we were pleased to see the recognition of the SSP financial challenge to SME’s, we feel that the Chancellor needs to go further in the case of care providers, all of whom will be under huge financial pressure and will struggle to cover the SSP enhanced payments. The mechanism to claim these refunds needs to be clear and swift to avoid cash-flow issues. NCF has been in discussions with the government to raise these issues, and convey the importance of treating the social care sector on par with the measures being introduced for the NHS. We are in regular communication with DHSC and other membership organisations in the sector in order to present a coordinated response to both COVID-19 and the ongoing underfunding and lack of reform in the sector. We are passing on your concerns to the government and working to ensure that social care is supported and championed as an integral part of the care and health system in this crisis.
Social care funding and reform
We were disappointed, but not surprised, that there was no mention of any plans for the longer term funding or reform of social care in the Chancellor’s speech; however, the budget document mentions that the £1bn funding for social care announced in 2019 will continue each year of this Parliament:
’The government is committed to long-term reform of adult social care and the Secretary of State for Health and Social Care has written to parliamentarians to begin building cross-party consensus on reform. Ahead of those discussions, the government will invest £1 billion of additional funding for social care next year, as announced at Spending Round 2019. The Budget confirms that this additional funding will continue for every year of the current Parliament to continue to stabilise the system.
NCF Voice: NCF continues to call for the urgent need for a social care reform agenda which recognises that a well-functioning and adequately funded social care and support system is integral to the functioning of the NHS and wider system. Without swift action to bring forward this reform agenda, the government is at risk of undermining its investment in the NHS and failing the most vulnerable in our society. Sadly, the government has missed an opportunity to address this in this its budget, but we are hopeful that the cross-party talks around the future reform of social care will focus on a future care system that works for both older people and people of working age – it matters to us all. We look forward to working with parliamentarians and officials as discussion begin.
Other points of interest in the budget
- An additional £6bn for the NHS to pay for staff recruitment and initiate a programme of building new hospitals and upgrades. The money also includes non-repayable maintenance grants of at least £5,000 for new & existing students on nursing, midwifery and allied health courses in England. These measures are on top of the previously announced £34bn a year by 2024.
- Funding over the next three years to speed up the discharge of individuals with learning disabilities or autism into the community from mental health inpatient care in England.
- An increase in the threshold at which National Insurance is paid, to £9,500, a saving of around £104 for the typical employee
- A new entitlement to Neonatal Leave and Pay (up to 12 weeks’ paid leave) for employees whose babies spend an extended period of time in neonatal care
- National Living Wage target – a commitment for the NLW to reach two-thirds of median earnings and be extended to workers aged 21 and over by 2024, provided economic conditions allow. Based on the latest OBR forecast, this means the NLW is expected to be over £10.50 in 2024.
- a £10.9bn increase in housing investment, with a commitment to build at least 1 million new homes by the end of the Parliament, and an average of 300,000 homes a year by the mid-2020s
- £643m for accommodation and support services to help people off the streets – this includes the £237m already announced by the Prime Minister for helping rough sleepers and a further £144m for associated support services and £262m for substance misuse treatment services
- A Non-UK resident Stamp Duty Land Tax (SDLT) surcharge – a new 2% surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021, aimed to help control house price inflation and to support UK residents to get onto and move up the housing ladder. The money raised from the surcharge will be used to help address rough sleeping.
- £5 billion to support the rollout of gigabit-capable broadband in the most difficult to reach 20% of the country, so that all areas are able to benefit
- The Shared Rural Network to improve 4G coverage with up to £510 million of funding to improve mobile coverage, with a target of 95% of the UK’s landmass having high quality mobile coverage by 2025.
- Fuel duty is frozen for the tenth consecutive year
- All alcohol duties frozen
- Abolishing the tampon tax
The spending envelope for the CSR 2020 has been set in this budget and the CSR will see an increase in day-to-day spending from £360.6bn in 2020-21 to £417.6bn by 2023-24. However, analysis from the Institute for Fiscal Studies suggests that commitments already made on spending on the NHS and schools, alongside the need to replaced EU structural funds (which are being replaced by a UK Shared Prosperity Fund) mean that the CSR is still likely to be a tight settlement round for other departments.