NCF Briefing: Spring Budget 2024
Earlier today, the Chancellor Jeremy Hunt delivered his Spring Budget to parliament. As expected, there were no new announcements for adult social care. Instead, the budget was focused on delivering pre-election tax cuts at the long-term expense of public services. It also appears to be an attempt to constrain the public spending of any future government. Any ambition that might have remained to deliver on the 2019 manifesto promise to ‘fix adult social care’ or to deliver on the 2021 People at the Heart of Care reform plan is well and truly gone
You can find a full summary briefing attached.
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Overall View
The key links are as follows:
The budget documents can be found at this link.
A transcript of the Chancellor’s speech can be found at this link.
NCF’s full response can be found at this link.
Response from the Care and Support Alliance at this link.
The big announcement was a further 2p cut to National Insurance but this and other tax cuts announced appear to rely on at least £19bn a year cuts to the day-to-day spending of government departments and public services post-election according to the Resolution Foundation.
Similarly, the OBR has stated that by “leaving departmental spending plans largely unchanged amid higher inflation growth, [the Chancellor] has also chosen no real growth in spending per person on public services over the next five years.” Departments are likely to see real terms of cuts of 2.3% a year from 2024/25 as a result.
The IFS agrees and states that the Chancellor’s assumptions would require “cuts to unprotected services of around 3.3% per year….This compares with cuts of 6.1% per year to those areas between 2009–10 and 2014–15…”.
Public sector investment spending is set to fall by a full 31 per cent as a share of GDP between 2024-25 and 2028-29, a cut equivalent to £17 billion in real terms. Despite all of this the tax burden is still set to rise – rising by the equivalent of £3,900 per household.
The Chancellor has essentially set a trap for the next government by announcing that there will be no spending review until after a general election to allocate cash to government departments and make the difficult decisions about spending cuts – that’s been left to the next government.
This budget is yet another demonstration of this government undermining its pledges to deliver adult social care reform. We are struck that we have gone from a position where there was a dedicated Health and Social Care Levy to “fix social care once and for all” in 2021, to one where National Insurance has been cut by 4p in the space of a year.
It is clear the Chancellor has missed a key opportunity to address the huge funding pressures on local government and social care providers alike – these pressures are leading to multiple councils from across the political spectrum declaring bankruptcy due to the spiralling costs of social care. For the thousands of people who are waiting for assessments and care packages, this budget does nothing to improve the accessibility or availability of care. For the organisations providing care and support, it does nothing to address the ongoing workforce and recruitment challenges.
We continue to call on the government to take a long-term, strategic approach to investment in adult social care as a key part of the nation’s infrastructure. Adult social care is a public service which unlocks economic growth, enables people to return to work, reduces demand on other public services and leads to more social cohesion.
A summary of the key announcements can be found in the attached.