‘National living wage threatens UK care sector’

The UK’s biggest care homes providers have warned against the government’s national living wage plan saying the measure would have adverse impact on the country’s care sector.

In a letter addressed to Chancellor of Exchequer George Osborne, five care homes say the introduction of a national living wage without an adequate funding would lead the care sector to a “catastrophic collapse”. The warning comes from Four Seasons Health Care, Bupa, HC-One, Care UK and Barchester.

Under the new plan, workers aged over 25 will get a minimum wage at the rate of £7.20 per hour from April 2016 and that will see a rise of £9 over the next five years. Major care providers who had initially supported the move say the care system will need help to deal with staffing accounts.

“In the care sector, either you pump a lot of money to maintain the same level of people or you have less people meaning that there’s less care. That’s very straightforward. That will be very similar to retail sector where a lot of people are working on a minimum wage. The government is artificially telling everybody about the work per hour. What will happen is that unless the extra cost is passed on to customers there will be less money and so less people are employed”, Marco Pietroboli, a London-based economist told Press TV.    

The head of the body representing the care industry warned Osborne that his plan will cost the sector £1bn by 2020. Last month, the UK Homecare Association also called on the government to address the funding gap saying “the continued supply of state-funded home care will become nonviable”.

Social sector officials say Osborne’s decision to raise the minimum wage will only add to the crisis by increasing the cost of delivering care.

'Welfare cuts impact'

Concerns mount ever since Osborne unveiled plans for welfare cuts worth billions of pound following the swearing in of the new government this year. The plan, which many say, is a repeat of the previous coalition government that caused an uproar. According to the Association of Directors of Adult Social Services, £4.6bn or 31% of overall social care budget has been cut since 2010. It says the social care councils are currently facing a shortfall of over £1bn.

 Some analysts say the government’s policy could backfire as the state itself employs a lot of carers and people on low wages.

“Always, it is a very difficult situation and of course Britain is not a unique in that respect. There has been a growing issue of care for the elderly people for a number of years and underfunded part of the economy that relies on people in their old age using their assets to be able to pay for it”, Pietroboli said.

Recently, the chief inspector of adult social care in England highlighted the plight of elder people by carers. Funding cuts was one of the reasons Andrea Sutcliffe cited while explaining the dilapidated environment at care homes.

Sutcliffe said carers are undermining their works largely because of funding cuts that have put them under “stress and strain”.

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