Living wage a twin-edged sword for care sector

The National Living Wage could have a catastrophic effect on the care sector. Picture: Contributed

In late July the UKHCA, an umbrella body for home care providers, wrote an open letter to the Chancellor which claimed that the National Living Wage could have a catastrophic effect on the care sector. They warned that an already existing gap between the real cost of providing care and the actual cost that local authorities are prepared to meet would worsen; unless the UK government resolves the issue of the funding of social care, they argued, providers would be forced out of care services.

The National Living Wage (NLW) will come into effect in April next year, entitling every worker aged 25 or above to no less than £7.20 per hour. Assuming a 37.5 hour working week that will amount to a modest annual salary of £14,040. From October of this year rates for the existing National Minimum Wage (NmW) will change. The NmW varies with age or employment status; the minimum rate for apprentices will be £3.30 per hour, for 16-17 year olds £3.87, and for the 18-20 age band it will be £5.30. The NmW will be highest for the over 21s, at £6.70 per hour, but still some 50p lower than the NLW will be on its introduction and much lower by comparison with the target of £9.00 per hour by 2020. Of course, it is not beyond possibility that the rate for the NLW could change between now and 2020. Five years is a very long time in politics and longer still in international stock-markets.

Epilepsy Scotland has a starting wage for staff in care or support services of £7.85 per hour, called the living wage before the controversial annexing of the phrase to the NLW. Employment costs form a key component of the calculation of how much should be charged for purchased services. In a recent tendering exercise one local authority posed the question as to whether organisations were committed to paying the living wage.

Aside from the issue of how much local authorities decide to pay care providers, there are other side effects of an increase in the National Minimum/ Living Wage which will affect the social care sector. Where a waking night shift might not be required but where support might be needed at some point overnight, a worker may literally sleepover. Typically, there is a fixed payment for each overnight stay, which might last ten, 11 or even 12 hours. However the time that a worker spends on sleepover is time at their workplace. If the payment for a ten hour sleepover is £35, that is £3.50 an hour and considerably under the minimum wage. An NLW of £9.00 could make sleepovers financially unviable. Be reassured though – anyone requiring care at home but without the sleepover option can be remotely monitored by motion sensor and call for help by means of a button kept handily and permanently about their person. Sleep soundly.

Social care as a sector will even more find itself competing on wages with others in the service sector and other sectors also. Perhaps that will mean a desirable level of self-selection – those in social care will work there because they really want to do so. Nevertheless there might not be enough of them who will elect to work in what can be a fulfilling job but which carries its fair share of stress and unsociable hours.

The most recent figures on the social services workforce published by the Scottish Social Services Council refer to 2013 when there were just under 190,000 people in Scotland employed in social services (7.4 per cent of all employment). Over 75 per cent of them were employed in housing support/care at home, care homes for adults and in the day care of children, none renowned for six-figure salaries. Each has numerous providers, from the private, public and voluntary sectors, but predominantly only one purchaser; government, national or local. If part of the intention of the NLW paired with reductions of in-employment benefits was to scoop the full cost of employment out of the employers’ purse and back to the public then I hope somebody has remembered government is one of those employers. I hope that they factored that in, otherwise the UKHCA’s prediction of catastrophe in an already battered, austerity-hit system – listen and you’ll hear it creaking – might very well come to pass.

• Lesslie A Young is chief executive Epilepsy Scotland www.epilepsyscotland.org.uk