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Ten years of the Care Act 2014

“Adult social care needs urgent attention. This must be top of the in-tray for any incoming government.” So said David Fothergill, chair of the Local Government Association’s Community Wellbeing Board on the launch of the LGA report to mark the tenth anniversary of the Care Act 2014 becoming law and designed to influence the general election expected this autumn.


In compiling the report, the LGA spoke to representatives from local government, the social care workforce, the voluntary sector, provider bodies, partner organisations, think tanks and politicians.


Unsurprisingly, the report’s headline findings are that there is “serious underinvestment” and “severe recruitment challenges”. At the same time, the LGA finds that the underlying legislation is sound:


“There is no need to dispense with the legislation. Build on it certainly; but do not reinvent the wheel,” said David Fothergill in the report’s executive summary.


A major plus which the Care Act 2014 brings to care providers is that doesn’t compel public funders such as local authorities to contract with a regulated entity. This means that, by invoking Group 7, Schedule 9 of the VAT Act, operators of care services can legitimately structure themselves to enjoy some level of VAT recovery. In essence, this means that care providers, via ‘welfare restructuring’ can be enabled to claim back VAT spent on costs incurred when providing services for publicly funded clients.


For more than 15 years, VAT recovery specialists Kieran Lynch & Co have been supporting care providers through the welfare restructuring process. Over that period managing director Jock Waugh and his team have returned more than £100 million in net benefits to the sector.


So, despite the many challenges described in the LGA’s report, challenges which care providers and commissioning bodies have to deal with every day; the underinvestment, recruitment difficulties, rising levels of unmet need and a ‘hand to mouth’ financial system based on short-term funding injections, the Care Act 2014 has given care providers the ability to counter the financial disadvantages arising from their VAT-exempt status. It can be fairly said to be an opportunity which care providers can ill-afford to ignore.


Thinking about restructuring for VAT recovery?


Submit your details here or call us on 0114 262 2127.

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