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Increase in National Insurance will not fund increased need for council-provided social care

September 21, 2021 5:30 PM
Originally published by Bedford Borough Liberal Democrats

Cllr Michael HeadleyLiberal Democrat Portfolio Holder for Finance Councillor Michael Headley revealed the lack of support for council funded social care from the Government's proposed 1.25% increase in National Insurance contributions at last week's Budget & Corporate Overview & Scrutiny Committee.

Commenting after the meeting, Councillor Michael Headley said "I think local residents are going to be very surprised that the increased National Insurance they are going to be asked to pay by the government isn't intended to cover the costs of increased care needed for an ageing population - with more local people needing care and many with more complex needs. The government have made a clear statement that they expect these costs to come from increased council tax or unspecified efficiencies. The extra National Insurance will support the NHS and changing what people have to pay towards their own care."

Liberal Democrat Group Leader Councillor Christine McHugh added "We agree that care costs should be capped, but we don't agree with funding it via National Insurance (NI) as proposed, which would disproportionately impact lower-paid individuals and the young. Many people don't realise that above a certain income you pay a much lower rate of NI - so lower-paid individuals contribute a greater percentage of their wage in NI than higher-paid individuals. Also pensioners don't pay any NI at all. Local residents rightly expect the new system to be fair - everyone paying a fair contribution and people being able to get a fair and compassionate response if they need care. This can't be achieved through the Government's proposal to raise National Insurance."

Councillor Christine McHugh continued "We're also disappointed that the underfunding of social care services hasn't been addressed, despite the Conservatives giving the impression that they would finally solve this problem. I imagine that people will be equally disappointed when they realise they'll continue to pay for social care through Council Tax, as well as the additional National Insurance contributions."