Last Updated on March 30, 2016
Dozens of worried social care providers fear closures as the crisis in the sector is made worse by this week’s introduction of the National Living Wage (NLW), a new survey has found.
The Independent Care Group (York and North Yorkshire) asked its members what they felt the impact of the NLW would be when it is introduced on 1st April. Some 82% said they feared the extra cost would have some or significant negative impact on their businesses. When asked about the future, 2% feared they would close within a year, 5% within two years and 10% within three years.
One respondent said, ‘Without an increase from our local council, the new National Living Wage will cause serious threats to our business.’ Whilst another added, ‘National Living Wage is good if the care sector is equally supported by a rise in council fees, otherwise care homes will not be able to survive.’
The National Living Wage will see the minimum pay for staff aged over 25 rise to £7.20 an hour from the current National Minimum Wage of £6.70 for those over 21. Social care providers say this will have a devastating effect on their already struggling businesses.
The Group’s Chair, Mike Padgham said, ‘This survey bears out what we feared; that providers are seriously worried about the future. Everyone supports the introduction of the National Living Wage because all workers, especially those working hard in social care, deserve to be paid fairly. But because local authorities, the NHS and, ultimately, the Government are not putting enough money in to properly fund social care, providers are going to really struggle to meet this extra cost and for some, it may signal the end.’
Respondents to the survey were in favour of the introduction of the NLW, with 69% agreeing or strongly agreeing that it was a good idea. Most (62%), felt it was at the right level. However, 51% disagreed or strongly disagreed that it was being introduced at the right time and 80% did not think it would attract more people to the care sector.
In the forecast for the next one, two and three years, respondents predominantly felt they would either see no change, a decline or even closure. Over the period, a fairly static proportion (from 40% to 44%) thought they would see a decline. 2% felt they would close within a year, 5% within two years and 10% within three years.
A homecare provider responding to the survey said, ‘Capacity everywhere is pushed to the limit. Only those local authorities meeting the whole cost for providers are fulfilling their obligation to ensure providers can pay a fair rate. The Care Act states, “When commissioning services, local authorities should assure themselves and have evidence that service providers deliver services through staff remunerated so as to retain an effective workforce. Remuneration must be at least sufficient to comply with the national minimum wage legislation for hourly pay or equivalent salary”.’