With council budgets at breaking point, services need more resources to protect a sector already in crisis
Tue 11 Feb 2020 07.16 EST
This year will be social care’s hardest yet. Planned increases to the national living wage and national minimum wage arrive at a critical time for a sector brought to its knees by cuts.
But the government has given little consideration to the implications wage rises will have on UK care providers and the wellbeing of those who rely on their services.
While £1.5bn was committed to the sector last September, many care providers remain uncertain about their long-term financial stability. That money may plug gaps in frontline services, but falls short of the amount required to cover the proposed wage rises.
One does not need to look as far as April to appreciate the difficulties awaiting care providers, though. This week’s supreme court case on sleep-in shifts is set to reignite a three-year legal battle about whether care workers should be paid national minimum wage while asleep. Providers once again fear a potential £400m back-pay bill from HMRC if the court accepts that time spent sleeping is working time.
Even if the court agrees that workers are not entitled to national minimum wage while asleep, there will still need to be a change in how workers are remunerated to ensure appropriate pay for time asleep. A regulated minimum rate for time spent sleeping will be crucial to achieving this, which I believe should be set by the Low Pay Commission to make it fair for both care providers and employees.
Whatever the decision, care providers should prepare for rising workforce costs which will subject the sector to its greatest financial pressure to date. Research by charity HFT already shows that one in five providers are offering care to fewer individuals, with 95% citing rising wage bills as the main reason for exiting contracts. This is to the detriment of people who rely on care and support for their day-to-day needs.
So, what steps can providers take to survive 2020 and combat further reductions to services?
First, they should review their contracts to identify those that may become unsustainable in light of future wage rises, and then seek to renegotiate terms where necessary.
For potentially unviable contracts, providers can point local authorities responsible for commissioning care services to their requirements under the Care Act, which requires local authorities to maintain healthy care market conditions, with a pool of providers able to deliver services of appropriate quality. This should mean increasing funding to cover the planned wage increases, as a core part of creating a sustainable market is setting fees at a level that ensures providers can deliver financially feasible services of a high standard.
If local authorities do not meet their requirements under the act, they can face legal scrutiny. Many care providers have so far avoided resorting to the courts but, with local authorities themselves having to make hard choices about jobs and services, legal proceedings may be the only way to compel them to meet their obligations.
Exiting unsustainable contracts should be the final straw for any provider. Sadly, serving notice may be the only way to force change and trigger a commissioner to reassess its stance, knowing that no other provider could step in and provide an adequate service using the funding available.
It is imperative that providers and commissioners find solutions and avoid a race to the bottom in the sector. Not only does this jeopardise care standards, but it could mean certain contracts become undeliverable for providers trying to balance the books.
With local authorities’ budgets at breaking point, central government must join the dots between its wage policies and social care funding, supplying the resources needed to guarantee the quality care millions of people across the UK deserve.
This year will be memorable for many reasons. The government must act to make sure securing the future of the social care sector is one of them.
• Matthew Wort is a partner at Anthony Collins Solicitors