Entrepreneur Robert Kilgour, chairman of Renaissance Care, which operates 12 care homes across Scotland, said the sector could no longer absorb increasing costs due to legislation imposed by both Scottish Government and Westminster legislation, compounded by the needs of an increasingly dependent ageing population.
Mr Kilgour was speaking as he announced today the company’s Levenhall Care Home in Musselburgh, East Lothian, is to close.
In an exclusive interview with The Scotsman, Mr Kilgour, who was the founder of Four Seasons Healthcare which grew to be the fifth largest business of its kind in the UK, said the “perfect storm” hitting the sector could impact on current and future generations of older Scots unless immediate action was taken.
In particular he cited extra costs incurred by complying with the Scottish Carers Living Wage, the Apprenticeship Levy, and the shortage of nurses compounded by the UK decision to leave the European Union.
The levy, introduced by Westminster, requires large employers who have pay expenditure of over £3m per year to pay 0.5 per cent of their annual bill to the government for apprenticeship training.
“We’ve seen a huge increase in dependency level in older people over the last five years which means more staffing is required,” said Mr Kilgour.
“But what is being paid by our main customer, local authorities with funding from the Scottish Government, has not kept pace with increasing dependency levels.
“I do like the concept of the Living Wage, now £8.45 for the those aged 18 and over, for our staff who work extremely hard. But the Scottish Government introduced it without giving local authorities enough money to pay the independent care home sector.
“However, as about 75 per cent of our residents are local authority funded and between 60 - 65 per cent of our fee income goes on staff costs, it is only fair that our main customer, the Scottish Government, properly funds this progressive move.”
Mr Kilgour added: “We also have a shortage of nurses with a lot less coming over from the European Union post-Brexit and quite a number are going back home.”
Dr Donald Macaskill, chief executive officer of Scottish Care, which represents the largest group of independent sector and health and social care providers across Scotland, said: “We have 31 per cent of nurse posts left unfilled, a quarter of the workforce leave each year, there is a daily struggle to recruit staff because of the relative low wages.
“We need to decide care work is worthy of high pay and reward. Providers, be they charities, private organisations or family-run homes, are now stripped to the bone and are struggling to maintain care, never mind to invest and innovate.
“Scottish Care is calling for signs of a serious commitment from Scottish Government, Local Authorities and Integrated Joint Boards to invest in delivering high quality care home provision in Scotland.
Miles Briggs, MSP, Scottish Conservative shadow health secretary, said he would be raising Mr Kilgour’s concerns with SNP Ministers.
“Robert Kilgour is one of the care sector’s most experienced and knowledgeable voices and Ministers need to pay heed to his warning.”
A Scottish Government spokesman said: “We value all staff working in social care and believe they should be properly rewarded for the vitally important work they do.
“Funding through the National Care Home Contract has increased by 13.2 per cent per week from 2015-16 to 2017-18, allowing independent care providers to invest in staff, quality of service, and to take a reasonable return from the business.”