Living wage a threat to the home-care sector?

The introduction of the National Living Wage could have catastrophic implications for the UK’s social care sector says a leading industry body.

The UK Homecare Association claims that plans unveiled in the budget for workers over 25 to be paid a minimum of £7.20 an hour from April next year are not feasible.

Research by the Resolution Foundation think-tank predicts that up to 1m workers across the whole care sector, including care homes and professionals looking after younger disabled adults, could end up getting pay rises by 2020.

Although the UKHCA welcomes the government’s commitment to low-paid workers, it warns that unless these additional staff costs are funded, there is a serious risk of ‘catastrophic failure’ in the home care market.

The group claims that to meet the living wage demands, an extra £753m in funding from councils and the NHS would be needed in the first year alone.

At present, local authorities pay homecare providers an average of £13.66 an hour, which in itself is not enough to meet current obligations in terms of the minimum wage.

Under the new arrangements, it is estimated that the cost will rise to a minimum of £16.70 an hour for services, placing additional strain pressure on an already struggling system. This is based on the cost of paying employees new wages along with the costs of running the services including travel expenses and pension contributions.

However, it is unrealistic to expect councils to find this extra money given the scale of cuts they are currently facing.

This could result in some home care providers going out of business, whilst others will be unable to carry on delivering services to people who are funded by local authorities. This would mean some of the most frail and vulnerable members of society could stop receiving support.

Implementing the policy will certainly be a challenge for the care sector and will require significant investment. Urgent action from the government and local councils is needed to address the funding deficit – without it, continued supply of state-funded home care will become unsustainable

Given that around 500,000 people over the age of 65 in the UK are dependent on home care support at a time when the NHS looks to home care services to enable people to leave hospital, it is imperative that the government steps up and commits to providing this vital investment in social care, giving a major boost to staff and improving the overall quality of care.