What was Chancellor Gordon Brown up to when he announced that the VAT rate on equipment to help older and disabled people live independently would reduce to 5%? Steve Hards reflects.
Despite calling his commentary ‘Budget 2007: VAT – No surprises’, accountancy writer Nigel Harris was surprised at the announcement that VAT on items of equipment for older and disabled people will be reduced from 17.5% to 5%. He says “This measure was unexpected and does not seem to have been particularly high on any lobby group’s agenda, from which one might infer that the take up will be fairly limited. All the more surprising since this was the one VAT measure announced specifically in the Budget speech itself.”
What the commentator was not in a position to realise, of course, is the context for this announcement, which is that the consultation about this measure will fit in around the anticipated announcement of the result of the Transforming Community Equipment Services Project. That project is expected to talk up the ability of social enterprise companies to make this equipment available directly to the public.
The budget announcement therefore appears to confirm the Government’s intention to shift the rising cost of equipment provision from statutory service providers to users and carers. The deeper implication is that this a tacit admission that it has failed to persuade health and social care services that investing in such relatively low-cost, preventative provision has local economic advantages.