via email:  matthew.turmaine.mp@parliament.uk

Matt Turmaine MP
House of Commons 
London. SW1A 0AA

26th November 2024

Dear Matt Turmaine MP,

Re: Impact of National Insurance Contribution on Social Care 

We are writing to express our serious concerns regarding the recent Budget announcements and their harmful impacts on Watford’s community, particularly in social care, healthcare, and essential services.  The sudden increase in Employer National Insurance Contributions (NIC) and rise in the minimum wage, introduced without adequate consultation or support, are placing extreme financial pressure on sectors already in crisis. This budget risks shutting damaging high streets and severely impacting healthcare services across the country. 

Starting with social care – the OBR has considered the NIC changes and calculated an increase of £800 per employee due to these changes. With over 1.5m care workers in England, the Government has only assigned a measly £600m in the Local Government Settlement which will not cover the increase in NICs, damaging a sector in desperate need of urgent support even before these measures. Social Care was already in a deep crisis prior to these announcements – already doubly hit by Labour’s cut to increased adult social care training funding and the dropped cap on care costs. Cllr Pattinson and I have met with local care homes in the past few weeks and it is clear that they are in desperate need of support. Governing is about choice but the Government has not chosen to protect care in this budget - rather they have chosen to put even more strain on this sector in desperate need of support.

We have also met with GPs who share very similar concerns to social care providers – patients at either end of their care and diagnosis will be deeply concerned that the Government is damaging these services. The BMA has written to the Government with initial research showing that the cost to GPs by tens of thousands of pounds per practice – limiting their ability to grow and expand their services. In their words “GP practices are on a knife edge now and cannot wait until next year to know if these costs will be covered. Surgeries are considering whether to hand their contracts back in the near future and close as they cannot remain financially viable. Others are considering staff redundancies. This will inevitably lead to a reduction in services to patients. It is completely inappropriate for the Government to introduce these unfair charges when practices have to plan their spending at least 12-18 months ahead to ensure they remain viable.” 

Our nurseries and pharmacies across town are also at serious risk. There are fears that 95% of nurseries will increase costs to parents, with as many as 2 in 5 potentially forced to close. These are critical services that families in Watford depend on. Similarly, pharmacies are also concerned about the costs affecting their ability to provide services into the community.

Turning to the sustainability and recovery of our high streets that are vital to local economies. You will have seen that the retail sector is struggling to recover after the pandemic and the ongoing cost of living crisis. Instead of supporting high streets this budget further damages their ability to compete with online retail that provides fewer jobs. The budget fails to review business rates or support investment in our high streets. I’ve met with business owners across the high street who are deeply concerned that the way the budget is implemented, particularly the change to NIC threshold, disproportionately impacts younger workers new to their careers and will deeply impact their growth. You’ll hopefully be aware that the British Retail Consortium, BRC, have written to the Government to highlight that the budget is set to increase costs to retail by up to £7bn a year, with almost £2.5bn of costs coming from the changes to NIC that was not in your manifesto.  These changes are a stark contrast to the local campaign by the Mayor promoting a ‘Shop Local’ campaign to support our high street.

The Government must urgently move to support GPs and care providers by granting an exemption for social care providers to the NIC changes or providing equivalent financial support through contract support. We are also profoundly concerned that the changes will damage our high streets, pass on costs to consumers, and limit employment for young people. The retail sector needs to see real support in terms of competition with online retail and the reversal of the increase in bus fares that will further limit their competitiveness.

This harmful budget comes on top of the Government's failure to deliver the promised funding for Watford General Hospital—a commitment that was central to your election campaign. The combination of unfulfilled promises and damaging policies is jeopardising essential services, the vitality of the town’s high street, and putting the health of our community at severe risk. We urge you to reject the budget in this form and take action to address the above-mentioned concerns to protect the health, well-being, and economic stability of our community. 

Yours sincerely, 

Councillor Ian Stotesbury 
Portfolio Holder for Portfolio Holder for Transport and Sustainability

Councillor  Jenny Pattinson 
Portfolio Holder for Wellbeing – Mental Health, Dementia, Sports Development.

https://www.standard.co.uk/business/money/parents-face-higher-nursery-fees-due-to-national-insurance-hike-charity-warns-b1193405.html

https://www.thepharmacist.co.uk/news/budget-changes-could-cost-each-pharmacy-12k-more-a-year/#:~:text=Increases%20to%20Employers'%20National%20Insurance,the%20sector%20as%20a%20whole