Budget could put the squeeze on care

Local government has welcomed the urban regeneration and health
measures in last week’s Budget, but warned of the potential impact
on care costs of raising the national minimum wage.

The minimum wage will rise by 40p per hour to £4.10 from
October and, possibly, to £4.20 in October 2002.

“While welcome for its impact on low pay, for many councils,
particularly in low pay areas, it may mean higher costs, especially
in purchasing and proving residential and domiciliary care
services,” said Brian Parrott, chairperson of the Association of
Directors of Social Services resources committee.

There will be an increase of 3.7 per cent per year in public
spending by 2003-4 rather than the previous commitment of 3.4 per
cent. Education, health and fighting drug-related crime will
receive £2.3 billion over the next three years, while a
further £1 billion will be spent on urban regeneration over
the next five years.

“We welcome the decision to help local authorities deliver the
urban renaissance,” said Local Government Association chairperson
Sir Jeremy Beecham, pointing in particular to the exemption from
stamp duty for all property transactions in disadvantaged
communities.

Other Budget winners include the children’s and working families
tax credits, maternity pay, the Sure Start maternity grant, paid
paternity leave and age-related income tax allowances for
pensioners.

For details, see www.treasury.gov.uk
/budget2001/index.html