Scottish social care organisations warn of catastrophic impact of increased costs

The CEO of one of a Scottish housing association has demanded urgent action from the UK Government to avert a crisis in the care sector.

Angela Currie of Hanover Scotland joined over 80 leaders of not-for-profit social care organisations urging Chancellor Rachel Reeves to reconsider plans for increased Employers’ National Insurance (NI) contributions in an open letter.

The Coalition of Care and Support Providers in Scotland (CCPS) has warned that the policy will add an estimated £30 million in costs to the sector next year, jeopardising the sustainability of vital social care services for adults, children, and young people across Scotland.

The coalition have emphasised that a failure to act risks catastrophic consequences for public services, undermining the government’s broader economic and social aims.

Angela Currie agreed, saying: “The consequences of this decision are potentially devastating for social care providers and the vulnerable individuals who depend on these essential services.

“At Hanover Scotland, we see daily the impact of high-quality housing and care on the wellbeing and independence of older people. These changes risk creating insurmountable financial pressures, forcing providers to make impossible choices about their future.”

The joint letter highlights that social care providers, unlike many other organisations, lack the ability to absorb such significant cost increases.

It warns of job losses, pay freezes, and potential closures of community-based support services as immediate risks of the policy.

The signatories, representing a wide spectrum of care provision in Scotland, argue that the exclusion of not-for-profit organisations from NI relief threatens not only individual service users but also the wider public services network – escalating pressure on the NHS, unpaid carers, and other support systems if care services are forced to scale back or cease operations altogether.

Social care in Scotland is already operating under intense financial strain, with many providers delivering contracts at a loss.

The proposed NI changes, coupled with the reduction in thresholds, could make many operations unsustainable, worsening the already precarious position of the sector.

Currie added: “The people who rely on social care services deserve security and support, not uncertainty. It’s vital that decision-makers recognise the unique pressures on our sector and act to shield providers from these costs.”

She recently warned that cuts to the housing adaptation budget would result in bed-blocking and increased burden on NHS and social care.

Currie called for urgent action, stating that housing associations like Hanover are being forced to make impossible choices between critical home adaptations and essential refurbishments such as kitchens and bathrooms.