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Government lacks clarity on Living Wage impact on care providers

The government has failed to provide any clarity on what effect the introduction of the National Living Wage (NLW) will have on elderly care providers. 

Answering a parliamentary question today (11 January), care minister Alistair Burt said that representations had been made and were “fully considered” as part of the process that fed into November’s Spending Review. 

However, the MP for North East Bedfordshire didn’t outline what assessments had been made. Instead, he noted: “Our analysis of the impact of the NLW for the Spending Review drew on projections and data on pay including information from the Office of Budget Responsibility and Skills for Care.” 

Burt reiterated that the latest settlement gives local authorities the ability to increase social care spending, through the introduction of the social care precept, and that from 2017-18 additional funds will be made available through the Better Care Fund. 

These answers, however, fail to fully address the question tabled by Greg Mulholland, the Lib Dem MP for Leeds North West, which asked: “What assessment he [the health secretary] has made of the effect on elderly care providers of the introduction of the National Living Wage.” 

Burt did note that the representations covered a range of issues, including the potential costs of the implementation of the NLW. “Additionally, I regularly meet with representatives of local government and the care home industry to discuss topics including adult social care funding, and will continue to do so.” 

Also today, following the budget announcement for spending plans in Wales, social care commissioners, providers and representative bodies are together warning the Welsh Government that the additional costs of the new NLW could lead to a “catastrophic failure” across care services, unless urgent action is taken to address continued underfunding. 

The Association of Directors of Social Services Cymru (ADSSC) and National Provider Forum, which is chaired by UKHCA, have written to ministers to underline concerns

Following last year’s Spending Review announcement council leaders and directors of adult social care services in England also said that the proposals appeared to “promise more than it delivers”. 

Last week, the Resolution Foundation added that implementing the new wage floor from April will be one of the first tests of economic leadership under devolved local governments.


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