How the Autumn Budget 2024 affects social care
‘Difficult choices’ announced by Chancellor of the Exchequer Rachel Reeves as she seeks to fix the NHS, restore stability and rebuild Britain
The chancellor began the Autumn Budget statement this afternoon with a stark warning: she’s had to make difficult decisions, she said, because of the state of the economy that she inherited from the previous government.
Photo by Sarah Agnew
Indeed, the Office for Budget Responsibility today published its Review of the March 2024 forecast for departmental expenditure limits, in which it says the previous government were not entirely forthcoming about how bad things had got; the OBR would have issued a “materially different” economic forecast earlier this year had it received “all the information available to” the previous administration.
To fill the ‘black hole’ in public finances, the Chancellor’s Budget will raise taxes by £40bn, with measures that include the ending of the nom-domicile tax regime, an increase in capital gains tax and an increase in air passenger duty for private jets.
But what’s been announced that will affect the social care sector?
There will be an additional £1bn for the special educational needs and disabilities (SEND) provision in schools, and an increase to the core education budget of £2.3bn. Some £1.4bn will be made available to rebuild 500 schools deemed to be ‘in the greatest need’.
Employers’ national insurance contributions are to rise from 13.8% to 15%, and the threshold at which businesses pay such contributions on an employee’s earnings drops from £9,100 to £5,000. But workers’ national insurance, VAT and income tax rates are unaffected. Income tax and national insurance will rise with inflation from 2028-29.
Spending on the state pension will rise by 4.1% in 2025-26, which the Chancellor equated to some £470 each for 12m pensioners.
The carers’ allowance is to rise from £81.90 per week to the equivalent of 16 hours under the national living wage. Carers will also be able to “keep more of their money”, says the Chancellor, with an allowance to earn more than £10,000 and still keep the allowance.
The government will now provide £11.8bn for victims of the infected blood scandal.
The Chancellor also announced what she called the ‘largest real-terms funding settlement since devolution’ to improve public services in the devolved administrations, with £3.4bn for Scotland, £1.7bn for Wales and £1.5 for Northern Ireland in 2025-26.
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