22 April 2002 Number 18

 

Subject

 

Response to the Chancellors Budget.

 

Background

 

A raft of announcements concerning health was made in the2002 Budget. They include: an extra 7.4 per cent to be spent per year for fiveyears on the NHS which will mainly be funded from a one per cent increase in employeeand employer national insurance contributions; a six per cent increase forlocal authority funded social care backed up by financial penalties for thoseauthorities that fail to provide intermediate care beds. This commentary outlines BUPAs reaction inrespect of the care home sector.

 

BUPAs position

 

BUPA believes that the net effect of the ChancellorsBudget will be detrimental to the care home sector in particular. The increase in national insurance will costBUPA Care Services 2 million in 2003-4 and the care home sector as a wholearound 50 million. This comes at atime when it is already in extreme crisis.This additional tax on jobs will do nothing to improve the sectorsfinancial position or stem the tide of nursing home closures.

 

BUPA is encouraged by the Governments announcement thatsocial services spending will increase by six per cent in real terms for eachof the next three years. However, pastincreases in personal social services spending have not been reflected in localauthority fee increases. In real termsfee rates have fallen by 5-10 per cent over the past three years.

 

To prevent further contraction of the care home sector,BUPA would like to see local authority fees increase by at least 10 per cent ineach of the next two years allowing the sector to plan for the future, knowingthe medium term is secure. Only thenwill providers be in a position to develop new services and facilities withoutwhich reductions in bedblocking and waiting lists will be unattainable.

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Furtherinformation: MarkBassett, Head of Public Policy, 020 7656 2491