Care England fears services ‘will go under’ due to wage increases

Stretched providers are being ‘attacked from multiple sides’ and will need help implementing wage increases that are due to come into force this year.

Care England, the representative body for independent providers of adult social care, is concerned about the cost to providers of implementing the National Living Wage (NLW), which rises 6.2% to £8.72 in April.

Around 625,000 (50%) independent sector adult social care workers are paid below £8.72 and will therefore benefit from the rise by an average of £600 per year.

Skills for Care research has found increasing the pay of the workers directly affected by the new rate will expand the wage bill in the sector by an estimated £375m-£400m per year, or £250m-£300m more than the wage bill would have risen if the NLW had just grown in line with inflation.

Professor Martin Green, Care England chief executive, said: ‘We are really concerned about the mounting workforce crisis as social care is attacked from multiple sides; the rise in the NLW and inability to recruit from overseas owing to new migration proposals.’

As reported in January, there are fears a points-based immigration system would effectively ‘shut the door’ on thousands of people needed to shore up the social care workforce.

Care England said financial difficulties faced by providers are made worse by the failure of fee uplifts to reflect changes in the NLW. It said some care providers are being given uplifts of under 4% and in some cases no percentage increase at all.

Prof Green said: ‘It is likely that there will be additional indirect costs associated with the rise in the NLW if employers provide similar pay rises to workers already paid above £8.72 in order to maintain pay differentials between experienced and new staff, job roles or competitors. This shortfall needs to be recognised by commissioners and met or services will go under.’

Earlier this month, a survey by national charity Hft, which supports adults with learning disabilities, found 95% of those surveyed cited rising wage bills as the main drain on resources.