Nicola’s Blog for November – the Autumn Budget

Budget Update: What the Latest Announcements Mean for the Social Care Sector

The Government’s latest Budget delivers several headline economic changes — but for social care, the message is mixed. While some measures may ease operational pressures, which introduce new cost challenges without offering meaningful sector-specific support.  In this month’s Nicola’s Blog I break down the key Budget points and what they mean for care providers, workforce-focused organisations, and the wider social care community in Surrey.

Minimum Wage Rises: Significant Cost Pressures Ahead

From April 2026, the National Minimum Wage for over-21s will rise  to £12.71 per hour.  For a sector already shaped by tight margins and staff shortages, this wage rise represents a major cost uplift. While supporting fair pay is vital, the increase will inevitably exert pressure on providers unless funded rates or local commissioning budgets keep pace. Organisations may need to review workforce planning, pricing structures, or productivity measures to ensure sustainability.

Fuel Duty Freeze: A Small but Welcome Reprieve

Fuel duty will remain frozen, offering modest relief for providers reliant on staff travel or fleets — particularly home based care organisations where mileage is a major cost driver. In a period of fuel price fluctuation, this freeze avoids further financial strain, even if it does not deliver new savings.

Electric Vehicles: Future Mileage Tax Confirmed

The government has confirmed a mileage-based tax for electric and plug-in hybrid vehicles, set to begin in April 2028. As EV adoption increases, this measure aims to replace lost revenue from reduced fuel duty.

For social care providers using EVs — whether for community care visits or service delivery — this means future running costs will rise. While EV incentives remain in place for now, organisations should factor the upcoming levy into long-term fleet planning and transport strategies if they use or plan to use EVs.

Limited Tax Relief or Borrowing Support for Small Businesses

The Budget does not include significant new tax cuts or borrowing support targeted at small or medium-sized organisations. Instead, the fiscal approach leans on “stealth taxes” such as frozen thresholds and certain duty increases.

For social care providers — many of whom in Surrey operate as SMEs — this means the hoped for avenues of relief are largely absent. Rising workforce costs, combined with unchanged borrowing conditions, may further tighten financial conditions across the sector.

NHS Funding: No Major New Spending for Health or Care

While the government reiterated its intention to “cut NHS waiting lists”, there were no major new funding announcements specifically for health or social care. Any benefit to the NHS or related services is likely to be modest and incremental.

For the social care workforce and providers closely linked to public services, this Budget does not signal significant structural investment or reform, which is a disappointment when considering the fiscal pressures our sector is under.

Social Care: A Notable Absence in the Budget

As anticipated, social care did not receive dedicated funding announcements, reforms, or structural commitments. With longstanding challenges relating to workforce retention, commissioning rates, and service sustainability, the absence of targeted support is a concern for the sector.

The Budget effectively leaves social care in a “status quo” position — despite widespread acknowledgement that the system needs long-term, strategic investment.

What This Means for Social Care Providers

1. Rising Workforce Costs

The upcoming wage increases will significantly impact payroll. Providers may need to reassess budgets, seek renegotiated contracts, or explore efficiency measures.

2. Vehicle-Related Costs Stabilise (for Now)

The fuel duty freeze offers some stability, but EV-driving organisations must plan for the 2028 mileage tax.

3. Lack of New Investment or Relief

With no major tax breaks or subsidised borrowing, organisations should not expect Budget-driven financial support for growth or modernisation.

4. Continued Uncertainty Around Public Service Funding

Without clear commitments to social care or substantial new health funding, the sector faces ongoing uncertainty around future government priorities.

Until next time,

Nicola

CEO Surrey Care Association.