Arthur Rank Hospice faces £260,000 extra costs due to NI rise as Cambridgeshire MPs sound alarm over impact
GP surgeries, pharmacies, charities and care homes in the Cambridge region could be left facing bankruptcy when the government’s rise in National Insurance contributions (NICs) comes into force from April, MPs have warned.
They say the move could have a “grave impact” on communities as “another burden” is placed on vital services.
Arthur Rank Hospice Charity, based at Shelford Bottom, faces an additional £260,000 in payroll costs as a result.
The hospice provides specialist palliative care and support to adults in Cambridgeshire with life-limiting illnesses.
Sharon Allen, CEO of the charity, said the rise would also have a significant impact on the organisation.
“We now have a clearer understanding of the additional National Insurance cost to the hospice, which is £260,000. This, alongside other financial pressures such as cost of living increases, creates a really significant impact for us. We are also of course unable to spend this money on enhancing our existing services,” she told the Cambridge Independent.
“Each year, we care for over 3,800 patients, which costs over £13million annually, and we remain very heavily reliant on the generosity of our local community to help us provide hospice care that everybody in our county needs now, and forever.”
The warning comes after MPs rejected attempts to secure exemptions for hospices, care homes, GP practices, dentists and pharmacies.
From April, employers will have to pay NI at 15 per cent on salaries above £5,000, instead of the current 13.8 per cent on salaries above £9,100.
The national living wage will also increase by 6.7 per cent for employees aged 21 or older – from £11.44 an hour to £12.21 – from April.
Pippa Heylings, MP for South Cambridgeshire, Ian Sollom, MP for St Neots and Mid Cambridgeshire, and Charlotte Cane, MP for Ely and East Cambridgeshire, say they have been contacted by many worried health and care providers in their constituencies since the announcement was made in October’s Budget.
The Liberal Democrat MPs are calling on the Chancellor Rachel Reeves to scrap the rise to ensure patients and those needing care can receive the vital services they need.
Ms Heylings told the Cambridge Independent: “The NHS cannot be fixed without properly supporting our social and primary care providers. Carers know this better than anyone. We cannot clear hospital backlogs, cut GP waiting times, or deliver the care our communities deserve if the very foundations of our healthcare system are being undermined.
“I have seen first-hand the tireless work of care providers in South Cambridgeshire. During my visit to Arthur Rank Hospice, I heard directly how worried they are about this NIC rise. They now face an additional £260,000 in payroll costs - on top of the fundraising they already rely on - money they simply do not have.
“At a time when we urgently need more GPs, the government is introducing tax increases that could force practices out of business.
“And it’s not just me saying this: I’m hearing it directly from GPs in Harston, Comberton, Queen Edith’s, Everston, and Melbourn. They warn these tax hikes will force them to cut services and staff. If the government is serious about fixing the NHS, it must rethink this reckless NIC increase.”
Last month Lord Howard, who is vice president of Hospice UK, accused the government of being “short-sighted”, because hospice care helps alleviate the problem of bed blocking in the NHS, and argued increasing employers’ National Insurance contributions would reduce their ability to help.
The government has said it recognises the “vital role” played by hospices, highlighting the extra £100m being provided to the sector, with a further £26m in funding for the support of terminally ill children and young people.
Health and care providers have called for an exemption from the NICs rise, warning that without it, they are “facing a struggle to survive this spring”.
Mr Sollom said: “I have had many conversations with GPs and care providers in my area and they are already struggling financially whilst dealing with the health service crisis. However, this rise in National Insurance contributions could mean some of them go out of business with grave impact on our communities.
“I spoke to a care home owner in my area this week providing over 70 much-needed care places for elderly people – including those leaving hospital ensuring beds are freed up. He employs nearly 80 people locally and highlighted just how challenging it will be to continue.
“It is a disgrace that a government so keen on growth is bringing in a tax that will not only prevent providers from expanding their services but could see some of them disappear entirely.”
Last week, The National Pharmacy Association (NPA) recommended its 6,000 members take collective action for the first time in its history from April 1 if there is no sufficient package agreed with the government.
The organisation said it has “been left with little choice”.
The advice from the NPA could mean independent pharmacies serving notice on opening hours, leading to fewer being open during the evening and at weekends.
Free home deliveries could also stop, with some services, such as providing emergency contraception and smoking cessation, withdrawn.
Pharmacies are contracted to open for 40 hours a week minimum, although most are open for 50 hours a week on average, the NPA claims.
Ms Cane told the Cambridge Independent: “I’ve spoken to constituents running GP surgeries, pharmacies, and care homes across Ely and East Cambridgeshire, and they’re deeply concerned about the unnecessary pressures Labour’s hike in employer National Insurance contributions will create. It saddens me to see yet another burden placed on the vital services our communities depend on.
“The National Pharmacy Association warns that around 1,000 pharmacies could close by 2027 - and here in Ely and East Cambridgeshire, we’ve already lost two since 2016. On top of that, rising care costs leave many providers with little choice but to pass these increases on to residents and their families.
“The impact of these ill-thought-through National Insurance rises will be far-reaching, and they risk doing more harm than good. We are calling on the Government to exempt GP surgeries, pharmacies, and care providers from these increases, so as not to make the health and care crisis even worse.”
Benedict Knox, a spokesperson for Healthwatch England, said: “Many patients have seen their local pharmacist close or experienced temporary disruptions due to staff shortages.
“This issue especially impacts older people and is particularly acute in rural areas, where people often must travel further to visit their pharmacist.”
Dr Leyla Hannbeck, chief executive of Independent Pharmacies Association, also warned of a “big acceleration” in closures.
In November, the Cambridge Independent reported that more than 7,000 charities have signed a letter calling for action on the rise. Among the signatories is Emmaus UK, which has a base in Landbeach.
Chief executive Charlotte Talbott said at the time: “We are deeply concerned about the impact of increased employer national insurance contributions on the Emmaus federation of communities and groups across the UK, and hope urgent action will be taken so the funds we raise help those with experience of homelessness and poverty, in turn saving money for the NHS, housing and other key services.”
The Chancellor has said she chose to raise NICs due to the “£22billion black hole in the public finances” left by the previous Conservative government.
