Hunt’s Budget boosts tax relief for foster and shared lives carers and support for care leavers

Chancellor also announces more support for disabled people to get into work but sector criticises lack of additional resource for social care system

Jeremy Hunt
Jeremy Hunt

Chancellor Jeremy Hunt has announced increased tax relief for foster and shared lives carers, improved support for care leavers and enhanced help for disabled people to enter the workplace, in his Spring Budget today.

However, social care leaders have criticised the lack of funding for core services for the coming years, while the statement also did not provide further detail about public sector pay settlements for 2023-24.

While many foster and other carers do not pay tax on the payments they receive from their provider for their role due to the so-called qualifying care relief (formerly ‘foster care relief’) scheme, the benefit this provides has been frozen for 20 years.

This has prompted concerns among fostering leaders in the light of evidence that half of carers had considered quitting their role due to the impact of the cost of living crisis.

More generous tax relief for carers

Hunt announced today that the earnings threshold for the scheme would rise from £10,000 to £18,140 per household from April this year, an amount that is pro rated based on how much of the relevant tax year the carers have been approved to carry out their role.

At the same time, the extra relief that carers receive for each person they care for will rise from £200 to £375 per week for each child under 11, and from £250 to £450 for older children and adults. The package will cost £15m in its first year of implementation, and all the figures will be uprated each year in line with the government’s consumer prices index measure of inflation.

The qualifying care scheme is applicable to anyone who has a child or adult placed with them by a local authority, Northern Irish health and social care trust, fostering agency or shared lives service, and encompasses staying put provision for former foster children, and kinship and parent and child fostering placements.

In the case of foster carers, the package represents a further boost following the Department for Education’s announcement that national minimum allowances in England would rise by 12.43% for 2023-24, above the rate of inflation. Those in Wales will increase by 5.5%.

‘Recognising the value of foster carers’

Sarah Anderson, a foster carer and founder of information service FosterWiki, welcomed today’s news on LinkedIn.

“We are pleased to see the government taking such a positive step forward in recognising the value of foster carers,” she said. “This will be a much needed boost for retention and recruitment but we must not rest on our laurels.”

Charities the Fostering Network and Kinship also welcomed the changes and the benefits they would bring unrelated and kinship foster carers, while Association of Directors of Children’s Services president Steve Crocker said the ADCS hoped it “will encourage more people who believe they have the right skills to foster to come forward so all of those children who need a foster placement find one”.

The Budget also included a boost for the staying close scheme, under which care leavers formerly in residential settings are provided with move-on accommodation and practical and emotional support from a member of staff from their former children’s home or someone they trust.

Boost for staying close scheme for care leavers

Funding will increase by £15m to £23.1m annually for each of the next two years, which Hunt said would enable around half (76) of local authorities to deliver it by March 2025. Fifteen councils were funded to pilot the scheme in 2022-23, in addition to five who were enabled to do so, along with three private providers, from 2017-18.

This was also welcomed by the ADCS, for whom Crocker said that the scheme helped “equip young people leaving care with the skills needed to live alone and navigate adulthood, such as how to cook, budget and access support”.

Hunt said the measure would help more care leavers into employment, in line with one of the central objectives of the budget, to reduce the number of adults currently out of work. This includes an estimated 2.5m who are economically inactive due to long-term sickness.

To tackle this, Hunt announced a number of measures to help disabled people into work, alongside a Department for Work and Pensions white paper on health and disability. This government’s proposals include:

  • Introducing a programme, known as universal support, to match people who want to work to existing vacancies, and resourcing the necessary training and workplace support to enable them to stay in work – backed by funding of £90m in 2023-24 and £250m in 2024-25.
  • Increasing support from work coaches for people with health conditions on employment and support allowance (ESA) or universal credit (UC), with funding of £90m in 2023-24 and £145m in 2024-25.
  • Scrapping the work capability assessment that determines eligibility for ESA and UC with limited capability for work or work-related activity. Instead, there will just be one functional assessment for disabled people, that for personal independence payment (PIP), the separate benefit for working-age adults designed to help meet the additional costs of their care and mobility needs. This responds to research that disabled people felt the two assessments overlapped and being repeatedly assessed.
  • Replacing UC for people with limited capability for work-related activity with a new UC health element, which people will receive automatically if they are eligible for PIP and UC. To incentivise people in this group – who currently have no work-related responsibilities – to take a job, the health element will not be stopped if they do so. Instead, it will taper away as their earnings rise, as with UC more generally.

Disappointment over lack of social care funding

But while the Spring Budget also announced significant extra funding for defence and childcare, there was no boost in core funding for children’s and adults’ services over what was set out in the autumn statement in November, to the disappointment of sector leaders.

Association of Directors of Adult Social Services president Sarah McClinton described it as a “missed opportunity”, saying that the resources announced in November “were welcome, but nowhere near enough to correct the underfunding of adult social care that’s been going on for decades”.

She added: “We need a long-term, fully funded plan that meets the needs of older and disabled people and their carers and addresses the staffing crisis in social care. We estimate that means another £7bn this year, and £9bn next year.”

For the Local Government Association, chairman James Jamieson said that, given the Budget’s ambitions to support people back into work, it was “disappointing there is no further investment in adult social care, public health and children’s services, which all play a vital role in supporting economic growth and helping people back into work, alongside boosting people’s health and wellbeing”.

The British Association of Social Workers, meanwhile, bemoaned a lack of action on tackling poverty – for example, by heeding its call to extend, from 60 to 180 days, the pause on action from creditors for people in debt provided by the breathing space scheme – and on investment in social work recruitment, retention and development.

‘Choosing between eating, heating and social care’

And the chief executive of social care advice provider Access Social Care, Kari Gerstheimer, warned that the lack of additional funding for the sector came with “too many of the working age disabled people, older people and carers we support are choosing between food, heating and social care”.

Carers UK chief executive Helen Walker said that, with adult social care vacancies rising by 52% to 165,000 in the year to March 2022, the “failure to set out a workforce plan for social care during this Budget is a massive missed opportunity”, with the sector “at risk of collapse”.

From the care provider sector, Care England chief executive Martin Green also expressed his disappointment, saying that “against the backdrop of a workforce crisis and rising vacancies, the rising cost of living and increasing energy costs, the stabilisation of the adult social care sector should be the government’s priority in the coming months”

The Budget also did not deal with the issue of public sector pay for 2023-24.

Social worker pay latest

Most public sector social workers in England and Wales are covered by the National Joint Council for Local Government Services, whose employers have offered staff a rise of £1,925 or 3.88%, for those currently on £49,950 or above. The increase would be worth 3.88% to 6.4% for social workers. But despite employers saying it was their “full and final offer”, it has been rejected by union leaders, who are now balloting their members on the proposal.

For social workers in the NHS, the Department of Health and Social Care has suggested that any pay rise should not top 3.5%. In its evidence to the NHS Pay Review Body, which will propose this year’s increase for government approval, the DHSC said increases of above this level risked increasing government borrowing or requiring cuts to public services at a time when “sustainable public finances are vital in the fight against inflation”.

For Cafcass staff in England, pay rises for 2023-24 will be determined by civil service rules, which are yet to be published, but are likely to be bound by the same 3.5% limit.

On the back of these rules, social workers and other staff working for the family courts body received a pay rise below that given to local government colleagues for the sixth time in the past seven years in 2022-23, a trend that has prompted Cafcass chief executive Jacky Tiotto to warn of an exodus of practitioners.

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One Response to Hunt’s Budget boosts tax relief for foster and shared lives carers and support for care leavers

  1. Chris Sterry March 16, 2023 at 6:01 pm #

    Yes, ‘Chancellor Jeremy Hunt has announced increased tax relief for foster and shared lives carers, improved support for care leavers and enhanced help for disabled people to enter the workplace’.

    A miracle you may say for a Tory Government, but do miracles really happen, well, perhaps not.

    Yes, many disabled people may wish to work and have the skills to do so, but with their disability will they be able to attend work without some assistance. If they will need assistance where will this assistance come from? Some may say family, but families are already saving the UK £billions, in fact from, a Carers UK 2021 report at least £193 billions so how much more will this government wish families to give. But families have many other commitments and could well have their own difficulties with finance and more available time.

    So the alternative could well be social care, but that too is in a severe crisis which has been for many years and each coming year the crisis grows. It is requiring a massive funding response some say as much as £7 billion, but I believe so much more at least £12 billion.

    In the care profession there are major shortages of staff, so already many in need of care are not receiving any or just a little to, perhaps survive, but some maybe not. While quality care is required the lack of carers is resulting in many instances of poor care being given, not because carers are not willing to provide good quality care, but they have insufficient time to do so. Their pay for the responsibilities they undertake are also well below what they should be and this is so similar to those in childcare. Another example of a budget proposal which has not been thought through. In both childcare and social care the carers could earn so much more in areas of much less responsibility and many are leaving to do so.

    But, is this government providing the funds to local authorities, (LAs) to fund this care, well the simple answer is either none or only a fraction of what is really required.

    The Budget made no mention of real social care funding and in the oppositions response to the Budget they too made no reference.

    So it is not just this current government that is totally ignoring social care, but also possible future governments.

    The lack of social care is causing many inequalities and many of these are also affecting the NHS, so lack of social care is also part of the NHS crisis.

    But this government is not listening, either through their ignorance or by their willingness not to, which it is, is up for discussion, but I have my own views on which it is, as I believe the government is the equivalent of the ‘3 wise monkeys’.

    This government just doesn’t care, the Parties may not be occurring, but the attitudes are still there.