“Success at Westminster, dismay at Holyrood. But on eNICs exemption, we are back in the running”

So, first the good news. Last night the House of Lords voted through amendments to exempt the vast majority of the health and social care sector from catastrophic NI increases, as set out in the National Insurance Contributions (Secondary Class 1 Contributions) Bill. The Lords also passed a key amendment which would make the government report on the impact of national insurance changes.

Over the past few weeks, we’ve been discussing the National Insurance Bill with MPs and engaging with peers on amendments. Many of our members have shared their own organisation’s perspectives about how the eNICs change would impact them, and the consequences for the people they support and employ. I want to thank all the members of the House of Lords who worked on and laid amendments yesterday, and every single peer who listened and voted for exemption to save social care. We can’t tell you how much your advocacy matters for social care in its time of crisis.

Yesterday’s votes give us hope, but the changes aren’t in the bag yet. Now they go back and forth between the Lords and Commons and we will need a lot of Labour MPs to stand up for what is right here, if these wins are to hold. But yesterday morning we saw no room to manoeuvre; today we are back in the running. We’ll take that for now.

In contrast to events in the Lords, yesterday the Scottish Budget was passed at Holyrood with zero commitment to eNICs cost recovery for providers from the Scottish Ministers and only cursory mentions of the sustainability crisis in our sector. This, despite us sharing compelling evidence of the disastrous consequences the policy will have for not-for-profit providers and the people they support.

Earlier this month we conducted a 24-hour survey of our member organisations. Over 50 members participated, representing a combined expenditure of over £850m, employing around 28,000 staff and supporting over 230,000 people across the whole of Scotland. Amongst the sobering responses, we learned that:

• 57% of respondents are seriously considering handing contracts back to commissioners next year
• 67% of respondents are budgeting for 2025-26 on the basis that they only expect to reach financial balance through the use of reserves. And of these providers: 91% would no longer be a going concern within four years, if they continued to reach financial balance through drawing down reserves in this way.

With an election year just over a year away, and with so much at stake for the Scottish people, we are surprised the Scottish Government seems ready to live with the consequences of choosing not to fund our sector and supported people. We are just as surprised that a new UK Labour Government chose to put the entire sector at risk through this deeply ill-judged tax, which disproportionately impacts low- paid women. Looking at headlines from the last couple of weeks from both sides of the border, it seems emergency funds can be found for other things – but not vulnerable people. It was ever thus.

But where both elected governments have failed the sector so far, the Lords have provided. So, our energy now turns back to Westminster and efforts to persuade MPs to see the value of social care – and how destructive the eNICs policy would be. There is – thanks to yesterday’s actions – still track ahead.  Please, UK Labour and Rachel Reeves, don’t waste this opportunity.