Government Spending Review

AvantecareCare & Support


The future is all about the November Government Spending Review

This morning Radio 4 news carried the headline on the consequences of the national living wage on the care sector.  An articulate speaker quite rightly said all eyes will be on the November Public Sector Review and made perhaps the most vivid point, this is not about paid workers having increased pay, which we all will welcome rather about the plight and risk to people in receipt of care.  It is also pleasing to see the largest four providers of registered care, writing an open letter to the Chancellor this week regarding the consequence of the Government not funding NLW next April.

Since the post-election budget announcement to introduce the national living wage, our sector has seen unprecedented lobbying of local and central government, with some reports of a funding shortfall of £2 billion for care providers to reach the £7.20 next April, let alone fund the increases for the next five years calculated at 11% per annum in terms of uplift.

No one disputes the benefits of finally acknowledging the traditionally undervalued and under paid care workers in our industry after many years of public sector funding squeezes but failure of Government, to acknowledge and provide additional funding to local authorities, to meet this new statutory initiative will have disastrous consequences for the many hundreds of thousands of people who depend on daily care and support from our sector.

For once such emotive language about the future of the care sector is not inappropriate.  A hard pressed domiciliary sector will collapse where very few providers receive the level of local government funding, recommended in the well-respected Burstow Report.  The disparity between self-funders in registered care and local authority funded placements will dramatically increase in April, further highlighting the inequalities in a two tier system as providers seek to cover some of the cost pressure through self-funder fee increases.

The Resolution Foundation have estimated that “160,000 frontline social care jobs are already paid below the NMW, with nearly 1 million below the Living Wage. Given that the majority of care services are publicly funded, what happens in terms of low pay in the care sector is to a very significant degree up to Government. Unless the sector receives appropriate additional funding to meet the higher wage-bill, the NLW is likely to imply a deterioration in service quality or availability”

What is pleasing to see is the understanding of local authorities who do not want to see providers pulling out of the market place.  At this stage the NLW appears to have united the sector between Councils and providers which is positive to see, whilst Government is lobbied to underwrite this new and indeed welcomed initiate to recognise low paid workers.

We are in unchartered waters facing a backdrop of a further five years of austerity measures which gives concern about what relief George Osborne will give this November.  Never before has there been such sustained and united lobbying by a sector on an issue which will have profound consequences for so many.

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