Mencap warns National Insurance rise could force closure of care services

Mencap, one of Britain’s leading charities supporting people with learning disabilities, has warned that it may have to close at least 60 of its services due to mounting cost pressures following the budget changes announced.

The organization says the rise in employers’ National Insurance contributions, combined with a sharp increase in the national minimum wage, will add up to £18 million a year to its annual costs. The charity’s chief executive, John Sparkes, warned that frontline care services could become unsustainable without higher fees from local authorities, who are responsible for commissioning most adult social care.

Currently, NID employers pay 13.8% on earnings over £9,100, but under the new rules the rate will rise to 15% from April 2025 and start at £5,000. Meanwhile, the national minimum wage will rise to £12.21 per hour for over-21s. Mencap says the measures will affect every one of its approximately 7,500 employees, including many low-paid care workers, resulting in an annual loss of £12 million. If the charity also raised the wages of other workers to maintain pay differentials, the total could reach £18 million.

Mencap supports around 600 services across England, Wales and Northern Ireland. While some sites – such as Churchfields in Essex, where 26 people with complex learning difficulties live – are not immediately at risk, Sparks warns that at least 60 services may have to close unless the charity gets “significant” increases. In funding from councils. He expressed concern about the potential loss of “basic daily social care” for some of the most vulnerable people in society.

These concerns resonate widely across the sector. Analysis by health and care consultancy LaingBuisson, commissioned by care associations, found that 80% to 85% of social care is provided by small, local organizations with little financial flexibility. With wage costs and National Insurance costs rising, carers fear a “significant reduction in care and support services”, according to Dr Jane Townson of the Home Care Association.

Local authorities, facing their own funding challenges, say they will need to increase provider fees by 9-10% to cover rising costs. Councils are already struggling with overspending and rising demand, says Melanie Williams, president of the Association of Directors of Adult Social Services (ADASS), describing the growing pressures as “insurmountable”.

ADASS estimates that an additional £1.8 billion is needed just to maintain current care services in England. While the government insists it is taking steps to stabilize and improve the sector – including increasing council funding by £3.5bn in 2025-26 – it admits it must address long-term challenges in adult social care.

A spokesman said the government was committed to supporting adult social care by improving staff wages and taking wider measures, noting: “We are giving local authorities an additional £3.5 billion in 2025-26… to support this sector.” However, for charities like Mencap, which are already operating on tight margins, the question remains whether this support will arrive in time to prevent the closure of services providing essential and life-enhancing care.