Last week’s announcement that the minimum wage is set to rise captured the public’s attention, and has generated significant debate. From next year, adults over the age of 25 will be paid a minimum of £7.20, which will increase to £9 by 2020. This is uplifting news for the millions of people earning the national minimum wage, many of whom make a significant contribution to our society in a range of key sectors ranging from industry to health and social care.
At Prestige Nursing + Care we have long been advocates of improving social care employees’ working standards and conditions. The vital service that care workers provide to the most vulnerable in our society, and the diligence and empathy with which the vast majority approach their work make them worthy recipients of higher wages. Few groups are more deserving of better wages.
However, the problem that the government’s pledge to increase wages over such a short term will encounter is one of cost. There are currently 1.6 million people employed in the social care sector, many of whom are lower earners. According to research from the Local Government Association, this is likely to cost councils an estimated £330 million a year in 2016, which will rise to approximately £1 billion a year by 2020. Furthermore, the demographics of the care profession compound these problems; just 11.5% of the sector’s employees are under 25 and therefore exempt from the increase, and this has fallen from 14.5% just three years ago.
The sector is rightly concerned about where this money will come from. Naturally everyone wants to see the earnings of social care staff rise, but the fact is that there simply isn’t the money to pay for it without reducing the number of staff or cutting the quality of care. The UKHCA recently found that local authorities pay an average of £13.66 per hour for homecare at present, below the UKHCA’s minimum suggested level of £15.74. The increase to £7.20 for the Minimum Wage will put even more pressure on those current levels.
Councils are therefore faced with double-edged sword of falling budgets and ageing populations, and their burden is likely to grow as Britain’s population becomes increasingly elderly. Similarly, with both home and residential care providers under financial strain, passing the bill onto them is simply not feasible.
The sector will cope with the reforms and will continue to work hard to care for the most vulnerable in society. However, the government needs to consider how to plug the gap that this will undoubtedly leave in the sector’s finances. Following the election, Health Secretary Jeremy Hunt assured the nation that improving social care is one of his most important priorities, and he will need to lobby his colleagues hard to ensure that the sector is adequately financed to support the introduction of the new minimum wage.