Ways you can cut costs ahead of the April National Insurance rise

Recently it was confirmed that care homes will not be exempt from the National Insurance rise that will come into force in April – news widely condemned by the leading voices in the sector. 

While an exemption was proposed by the House of Lords, this amendment was not supported by the House of Commons, and now the care sector faces the prospect of having to budget for an increase in contributions of 15%, rising from the current rate of 13.8%. 

Not only that, but the new measures will lower the threshold at which employers must start paying National Insurance contributions to their employees – from £9,100 to £5,000, meaning that the financial hit will be two-fold: many care homes will have to find funds to cover a higher rate of contributions for more people. 

The news was met with widespread disapproval from many voices within the care sector, who warn that such an increase will stretch budgets to breaking point, even potentially leading to widespread closures.  

In Care Home Professional, Professor Martin Green, CEO of Care England, said: “Today, we bear witness to a devastating blow that seals the fate of thousands of care providers across our nation. In a callous act of indifference, the government has dismantled the core principles and ethos of the Care Act, abandoning millions who depend on vital support. This is indeed a dark day for community-based care, not only a ruthless assault on those we protect and employ, but on the very fabric of our democracy.” 

Before the vote, Care England were uncompromising in their stark forecast for what the raise would mean for the care sector, as they warned:  

• 72% of providers say their businesses will become unviable within the next year 

• 64% will be forced to make staff redundancies 

• 22% plan to close their services completely 

Karolina Gerlich, CEO of the Care Workers’ Charity, said: “The government’s decision to pass the NIC Bill without exempting the social care sector is both irresponsible and short-sighted. This policy imposes a substantial financial burden on a sector already in crisis, jeopardising the livelihoods of dedicated care workers and the essential services they provide. We urge the government to reconsider this approach and implement measures that protect and support the social care workforce and the vulnerable individuals they care for.” 

With care homes wondering how they are going to accommodate another expense which will further stretch already thin budgets, there has never been a more important time to consider every possible measure that can help to save money and cut down on expenses. 

So, we have put together some ideas on how care homes might be able to reduce running costs elsewhere to ease the strain caused by the NI rise. 

Involve your team in the process 

Sometimes, it’s care staff that are best placed to spot inefficiencies in the way a service is operating, and as efficiency goes hand-in-hand with cost savings, it’s a good idea to involve your team in the process and get their opinions on where savings can be made from an operational perspective.  

Maximising schedules and staffing levels. 

Sometimes it isn’t necessarily the number of staff you have (or lack thereof), it’s how their time and efforts can be maximised for best results. With inefficient ways of calculating dependency of residents, this can quickly lead to staff hours being wasted or staff being brought in at an even greater expense, when in reality a more efficient system of quantifying dependency means those extra staff might not be necessary.

We all know the issues that the care sector faces with recruitment and retention rates, so the last thing you need as a manager is to find inefficiencies in staffing hours. This is why it’s important to utilise a good rostering system and a dependency tool that will help you maximise the staffing levels, to avoid any wasted expense. 

Values-based recruitment 

At UK Care Week, it was suggested that the time where staff are most likely to leave is within the first three months of being at a care home. If this happens, it means that all the time, energy and money you have put into hiring a new member of staff goes out the window, and you have to start the process all over again. So, the answer is to make sure you are hiring the right people in the first place, and to make sure that they are supported early on and set on the best path for long-term success.

This is where values-based recruitment comes in. You need to ensure that as part of your hiring process, you are attracting the type of person whose values match those of your care home, who has the right personality to ensure they remain committed to the home over the long term. It was also said that while many people leave care homes soon after joining, often they stay within the sector – so the right people are out there, you just need to make sure you are targeting them. But once you have hired the right people, then you need to ensure you don’t give them any reason to leave.

As mentioned above, you can provide support for new staff members by conducting regular reviews on progress, offering a mentor system with more experienced members of staff, or providing training to ensure they are making progress in their learning and development. 

Read more here about how to get care home recruitment right

Review cost-cutting measures 

You can do simple things like reducing stationery and storage costs by digitising more of your care management functions. With the amount of stationary that is needed– medication and care papers, physical audit records, storage areas and boxes – you've probably been spending more on it than you realise. You could also contact your suppliers to ask if any discounts or loyalty schemes are available, and as part of this process it would be a good idea to carry out price comparisons on services such as internet providers and any outsourced functions like cleaners to make sure you are getting the best deal. 

Invest in digital software 

One of the biggest savings you can make to combat the rise in National insurance would be to maximise your care outcomes and eliminate many inefficient practices that are contributing to untenable operating costs, such as paper-led or manual processes. While it might seem daunting at first to invest in a new way of doing things, with the right long-term provider, you can partner together to implement digitised processes to improve efficiency over time.   

The right provider will grow with you and help you on each step of your digital journey, providing new solutions as and when you need them. A provider like Person Centred Software will give you the opportunity to grow on your own time and will provide the right guidance and support to help you make the most out of any new digital solution you opt for, which, in turn, will help you save on costs in the long run. 

To read more about why digital solutions will help you save money ahead of the NI increase, just click here.