The Prime Minister has set out plans to tackle the Covid backlogs, reform adult social care, and bring the health and social care system closer together on a long term, sustainable footing, following a £36 billion investment over the next three years.
From April 2022, the government will introduce a new, UK-wide 1.25% Health and Social Care Levy, ringfenced for health and social care. This will be based on National Insurance contributions (NICs) and from 2023 will be legislatively separate.
All working adults, including those over the state pension age, will pay the levy and the rates of dividend tax will also increase by 1.25% to help fund this package. Every individual will contribute according to their means. Those who earn more pay more, with the highest earning 14% of people paying around half the revenues.
Employers, who benefit from a healthy workforce and a tax-payer funded health service, will be asked to contribute so the costs are more widely shared.
This will raise around £12 billion in extra funding per year, to be invested in frontline health and social care across the UK over the next three years.
The government will support those without savings – with the state covering all care costs for anyone with assets under £20,000.
Anyone with assets between £20,000 and £100,000 will be expected to contribute to the cost of their care but will also receive state support, which will be means-tested.
The new £100,000 limit is over 4 times higher than the current limit of £23,250, meaning many more people will be eligible for support than under the current system.
The social care workforce will receive new training and qualification opportunities, so they have the opportunity to progress and improve, while providing an even better standard of care.
The pandemic pressures on the NHS means that the number of patients waiting for elective surgery and routine treatment in England is now at a record high of 5.5 million. This backlog of patients could reach 13 million by the end of the year if left unchecked. Before the pandemic, nine out of ten were waiting fewer than 25 weeks in England. This has now risen to 44 weeks.
The new funding is expected to fund an extra 9 million checks, scans, and operations. The NHS long term plan committed to increasing activity year on year. In recognition of pressures from Covid, this will now increase to 110% of the planned activity levels by 2023/24.
The reform means that no-one in England will now have to pay more than £86,000 in care costs over the course of their lifetime. This is equivalent to around three years in care. This will apply regardless of where they live, how old they are, what their condition is, or how much they happen to earn.
The government will set out a detailed plan later in the autumn to enable Local Authorities and other providers to invest in technology, innovative methods of care and in their workforce.
Chancellor of the Exchequer Rishi Sunak said: “We’re tackling the NHS backlog and taking decisive action to fix our broken social care system.
“This significant £12bn-a-year long-term increase in public spending will improve people’s lives across the UK – but our health and social care systems cannot be rebuilt without difficult decisions.
“The new Health and Social Care Levy is the necessary and responsible thing to do to protect the NHS, sharing the cost between businesses and individuals and ensuring those earning more pay more.”
Amanda Pritchard, NHS chief executive, said: “It’s absolutely right that NHS staff, who have worked tirelessly throughout the pandemic to care for hundreds of thousands of Covid patients in hospital, get strong backing to recover routine services and begin to tackle the Covid backlog.
“The pandemic is still with us and we will have to live with the impact of Covid for some time, so the additional funding confirmed this week will help meet those additional costs, and give the NHS clarity for the coming years while delivering millions more of the vital checks, tests and operations that patients need.”