Osborne Faces Funding Pressure

Chancellor George Osborne is under increased pressure to raise social care funding to avoid a financial crisis that has been heightened as a result of his decision to raise the minimum wage. Research from the Resolution Foundation has found that Osborne’s decision to raise the minimum wage to £9 an hour by 2020 will cost the social care sector £2.3bn. Consequentially, the public would be responsible for footing around £1.4bn of the costly bill because two-thirds of social care provision is funded through local government. Given that local governments have been left £20bn worse off following budget cuts, where this money will come from remains a mystery. This also reflects that it is not just the social care sector that is challenged by the cuts, but a huge variety of public services, with sources announcing that local authorities could go bankrupt.

Social care has already been forced to reduce back office support and cut all but essential services following previous budget reductions. Without extra government funding frontline services remain the only thing left to cut. This could be in the form of shorter home visits or additional limits on the – already increasingly restricted – vulnerable people’s eligibility for publicly-funded care.

Raising the minimum wage will push the social care sector to breaking point. The sector’s level of funding is inadequate to compensate for the added expense without either reducing the number of staff or cutting the quality of care, both of which are undesirable options that Prestige Nursing + Care has examined  in previous blogs.

The news is, of course, good for the 850,000 frontline care workers who will benefit from the new wage. A pay rise could help with one of the sectors biggest struggles; recruitment and retention, as staff earnings will rise by an average of £1,250 a year by 2020. Care workers clearly deserve these wages, as they provide a crucial role in supporting the most vulnerable in society through meticulous care. Now it is up to Osborne to provide more money so that the social care sector can meet these costs without collapsing, and it will certainly be interesting to see what his Autumn Statement has in store for the sector.

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