“National Insurance Increase to Fund Overhaul of Social Care and NHS Post-Covid Recovery”
Boris Johnson has announced the first details of a significant reform to adult social care, part of a broader initiative to help the NHS recover from the disruptions caused by the Covid-19 pandemic. The plan involves a major shake-up of how social care is funded and integrated with healthcare services across the UK.
The proposal outlines the financing of adult social care through tax changes, with a focus on increasing national insurance contributions. Starting in April 2022, employees, employers, and the self-employed will face a 1.25 percentage point rise in national insurance contributions, as well as a similar increase in dividends tax. By April 2023, this tax increase will be rebranded as a “health and social care levy” and appear separately on tax records.
The government estimates that the tax rise will generate an additional £12bn annually for health and social care, for a total of £36bn over the next three years. Of this, £5.4bn will be allocated to social care in England, with a portion earmarked for training and workforce support. Additionally, £16bn will directly support NHS England, and £8.9bn is designated for addressing the backlog caused by Covid-related delays in healthcare services. Finally, £5.7bn will be distributed to devolved nations to support both health and social care, though the exact distribution for social care beyond the initial three years remains unclear.
