Hospices across the UK are set to receive additional support to help cope with the upcoming rise in National Insurance (NI) contributions, Health Secretary Wes Streeting has pledged. This comes as many hospices face significant financial difficulties due to changes in tax and rising costs.
The Financial Strain on Hospices
Hospices play a vital role in providing end-of-life care, ensuring that patients with terminal illnesses receive compassionate, specialized support. Unlike the NHS, hospices rely heavily on charitable donations, as only about one-third of their funding comes from the government. This dependency on public and charity funding means that any increase in operational costs can severely impact their ability to continue services.
- Increased Costs and Budget Challenges: The hospice sector has already been struggling with increased staffing costs and budget constraints. According to data from Hospice UK, 2023-24 has been described as “the worst financial year” ever experienced by the sector. Rising wage bills and other operational expenses have driven these organizations towards an estimated £60 million deficit.
- Impact of National Insurance Contribution Hike: The financial burden is set to increase further with the announcement made by Chancellor Rachel Reeves. From April, employer NI contributions will rise from 13.8% to 15%, and the threshold for payments will be lowered from £9,100 to £5,000 per year. This will place additional strain on hospices already operating with tight budgets, forcing them to make tough choices, including reducing services.
The Importance of Hospice Services
Hospices provide free care tailored to individuals’ needs, either at the patient’s home with medical visits or within the hospice facility itself. These services not only support patients but also relieve pressure on the NHS. The ability of hospices to provide holistic, comprehensive care at a lower cost than hospitals means they are an essential part of the healthcare system.
Service Cuts Amid Growing Demand
Recent figures show that one in five hospices in the UK has had to cut services in the past year. This reduction comes at a time when the demand for hospice care is on the rise. As hospices reduce services, more patients are left without the care they need at a vulnerable time in their lives.
Hospice UK’s chief executive, Toby McLean, voiced the concerns of many when he stated, “With hospices coming close to being at breaking point, closing sites and making difficult decisions with no security for their future, what confidence and assurances can we be given to allow us to plan for 2025 and beyond?”
Streeting’s Response and Future Plans
Responding to these pressing issues, Health Secretary Wes Streeting acknowledged the challenges that increased NI contributions pose for hospices. He emphasized the importance of protecting these services and stated, “I’m currently reviewing our budget for next year to ensure we can support our hospices.” He assured that more detailed plans would be shared before Christmas to give hospices the time needed to plan for the next financial year.
Streeting’s recognition of the importance of hospices is personal as well. He shared that his own family has experienced the vital support hospices provide. “I cannot praise the hospice movement enough. I want to see more of that end-of-life care available,” he told the BBC. He also highlighted the context of this issue within broader discussions, such as the recently published assisted dying bill, noting that better end-of-life care could reduce the push for assisted dying.
Calls for Further Clarity and Exemptions
The Liberal Democrats have pushed for more immediate action. Health spokesperson Helen Morgan called on Streeting to “urgently clarify” the measures he plans to implement. Morgan emphasized that many hospices are already on the verge of closure and that the tax increase could be the final push that forces them to shut down. “The simplest thing would be for the government to listen to hospices and exempt them from this tax rise,” she said.
Moving Forward: A Critical Moment for Hospices
The coming months are crucial for the hospice sector. Without timely government support or tax exemptions, many hospices risk further cuts or even closure. The pledges made by Streeting provide some hope, but the sector awaits concrete action. Ensuring hospices have the financial resources to operate sustainably is not only an economic concern but a vital social and healthcare priority.
