THE BLOG

Living With the Living Wage

15/03/2016 11:20 GMT | Updated 16/03/2017 09:12 GMT

April 2016 sees the introduction of the living wage. For anyone working and aged 25 or over (and not in the first year of an apprenticeship), that means earning at least £7.20 per hour, an increase of fifty pence per hour.

In essence, given the cost of living in 2016, that doesn't sound like a particularly exciting announcement. After all, what is an extra 50p per hour honestly going to buy you? Yet the introduction of the living wage is one of the most hotly discussed topics in social care. Why? Because it may tip some care providers over the edge of viability and see homecare and care home services close.

People, and their time, are the most expensive element of social care. Good care means recruiting good people and paying them a decent wage. Whilst no one I know would challenge the idea that care workers are worth at least £7.20 an hour (I would personally argue they are worth a huge amount more and that the profession is greatly undervalued), the question for many care providers is how are they going to pay the living wage?

Given that care provision is largely privatised, the view amongst many people in society is that it should be easy for care providers to meet this wage increase. Ask care providers, however, and they will give you a much more impoverished view of the sector. This includes local authorities not paying the true cost of the care they commission, private funders topping up those who are publicly funded, a complex picture of NHS continuing healthcare funding, and escalating costs associated with regulation (CQC) and recruitment (often overseas recruitment) and difficulties recruiting nurses (leading to having to pay more money to attract staff).

Against this backdrop, it's worth pointing out that some providers already pay their staff the living wage, and more, and have been doing so for some time, which perhaps begs the question what is their secret? It may lie in having more people privately funding their care. It must also be remembered that not all social care providers are commercial businesses - some are not-for-profit organisations, charities or affiliated to particular religions, all of which offer a different working model that often frees up, or brings in, more funds for the frontline.

But many more care providers have owners who expect to see a return on their investment. This fact doesn't sit well with the general public, many of whom feel uneasy about the idea of making a profit from the care of some of the most vulnerable people in our society, particularly since in healthcare we pride ourselves on having a national health service.

My father lived in care homes run by a small business owner, a large corporation, and a not-for-profit provider, so I have no particular axe to grind regarding ownership models. Privatised social care has been something successive governments have accepted, and I doubt that will change any time soon, so like it or not we have to live with the status quo.

Because of the 'business' model in social care, any complaints from care providers about wages often fall on deaf ears, but these are worrying times. No one wants to see social care providers fail, unless of course they are providing poor care. A provider's business model is surprisingly unimportant to residents and relatives when their care home is threatened with closure, or to isolated people depending on a homecare service to get out of bed in the morning, have a wash, a hot drink and a meal.

Finding a way to comply with the law, pay staff the money they clearly deserve, and still run a functional business is, it seems, something that is only going to be achievable across the sector if the biggest fly in the ointment - local authority funding - is increased. The two per cent 'social care precept' that local authorities have the option to levy on council tax bills from the start of the next financial year isn't going to go far enough according to social care funding experts, so the government are left with a stark choice.

Wait and see if social care providers fail, or put in some extra money to help councils pay the true cost of care. There is precious little understanding of what care provision really costs, and regardless of whether a provider has a profit making model or a not-for-profit model, the true cost of care is one that is greatly undervalued. The living wage will help to ensure that staff are more valued in the future, but without providers to work for that will be irrelevant.