Engage: How do we afford the living wage for care workers?

How many care providers pay the living wage? Is there a business case for paying the living wage? How much would paying the living wage improve the quality of care? What would it actually cost? These are just a few of the many questions raised and debated in a workshop jointly led by ILC-UK and the Work Foundation which I attended earlier in the week and which drew on initial research findings undertaken on behalf of the Joseph Rowntree Foundation. 

 

The Commission on Residential Care (Demos 2014) which was chaired by Paul Burstow MP included a recommendation that care should become a living wage sector. 

 

I think this is one of the most important current issues facing the social care sector.

 

Hilary Ingham (Work Foundation/Lancaster University) gave a comprehensive overview of sector pay, which made extensive use of Skills for Care data, and showed:

• 77.5% of care workers are currently paid below the living wage
• 21.3% of care workers are actually paid below the National Minimum Wage.

The analysis highlighted differences by age, region and type of provider – no real surprises! The average increase in earnings to establish the living wage was estimated as £1257 for each care worker and with NI and pensions this increases to £1528. There can be no doubt that this is a substantial cost. In fact the total cost of establishing such a living wage settlement (for care homes only) using these figures was estimated as £976.3 million. And at a time when public sector funding continues to be squeezed and there are increasing demands for care there were few at the workshop with any confidence that it will be introduced across the care sector any time soon!

 

The Work Foundation/Lancaster University work has explored options for funding the living wage for care home works (including ancillary staff) which include: reduced benefits and increased tax revenues; cuts or changes to universal benefits; integrating care and health; improved commissioning. In a way the list itself highlights some of the complexity of the issue and the fact that low pay in care homes cannot be separated from commissioning and procurement and what LAs pay for care. It cannot be separated from benefits and incentives. It has to be linked to terms and conditions, training and development opportunities as well as the introduction of a proper career structure for care workers across both the care and health systems.

 

There are also questions of how differentials are maintained and dilemmas about the relationship between pay and job satisfaction alongside pay and quality of service.  The evidence is still patchy and the absence of good data makes it easy to do nothing. I believe that this is a debate that the care sector (both commissioners and providers) need to have with the public. There needs to be a better understanding by people receiving care, their families and the wider public about the value of care and its real cost. I reckon greater transparency (including agreeing a reasonable level of profit) would be a good starting point.

 

There are alternative models to procurement which seem to be entirely driven by securing care at the lowest possible price. The National Care Forum was formed to give a voice to not-for-profit provision. Our members operate in the same market and with the same challenges to workforce recruitment and retention. Some of our members have already committed to be a living wage employer. Our most recent pay survey (November 2014) found that for care workers the mean average pay at £7.80 was only 5p below the living wage. Amongst not-for-profit providers staff costs of 70% of turnover are not unusual. It is not profit that is the issue but what companies do with it – reinvesting in the workforce, service and quality to secure future sustainability.

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Des Kelly OBE has been Executive Director of the National Care Forum since 2003, a membership based organisation established to promote quality care outcomes for people receiving care and support services through the not-for-profit sector. 

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