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Mencap, a charity that provides support to individuals with learning disabilities, may be forced to cease operation of approximately 60 of its services due to the rising cost of National Insurance contributions. The non-profit is among many care organisations warning that increasing National Insurance costs stemming from recent budget changes will effectively lead to them having to axe vital services. As of yet, Mencap’s service for Barry and Betty, two individuals with learning disabilities that require round-the-clock support, is not under threat. However, Mencap fears that it will need to close other services due to rising costs.
Currently, businesses are required to pay a rate of 13.8% National Insurance on any of its employees’ earnings above £9,100 each year. This rate will increase to 15% in April 2025. Mencap estimates that the rise will cost it £5.3m annually. The government also announced an increase in the national minimum wage during the Budget, and hourly rates for individuals over the age of 21 will increase to £12.21 per hour. The charity alleges that the increase in national minimum wage will require a further £6.7m in expenses.
In total, Mencap expects the changes to cost up to £18m annually. In addition to Mencap’s concerns, local authorities that pay most of the social care costs for older and disabled people argue that the rising costs for the sector are “insurmountable”. The government; however, is providing extra money for councils in England next year as part of its £3.5bn in further funding.
Although Mencap’s service for Churchfields is currently safe, the contracts provided to offer others similar services may come to an end. Mencap alleges that the increase in National Insurance contributions, particularly for individuals who worked part-time and previously were below the threshold for paying taxes, in addition to the increase to the national minimum wage, will provide a significant impact. Mencap’s CEO, Jon Sparkes, believes the changes may require the charity to cease running at least 60 services
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