Living wage risks causing 'catastrophic failure' in homecare sector

Will Green is news editor of Supply Management
28 July 2015

The UK Homecare Association (UKHA) has warned chancellor George Osborne that without additional funding for local authorities the living wage will make state-funded homecare “unviable”.

In a letter the association, which represents more than 2,000 homecare providers across the UK, said it estimated that implementing the living wage and addressing “the existing underfunding of homecare” would require an extra £753 million from councils and the NHS in the first year.

“We welcome government’s commitment to low-paid workers through a new national living wage,” said the letter.

“However, unless the additional costs are fully funded there is a serious risk of catastrophic failure to support people who receive state-funded care at home.”

UKHA said it had calculated that councils paid an average of £13.66 per hour for older people’s homecare, which would go up to £16.70 per hour under the living wage, taking into account care workers’ travel time and all other costs.

The letter urges the chancellor to increase funding to councils in the upcoming spending review, ensure regulators are empowered to oversee the commissioning practices of local authorities, make welfare services VAT-free and consider tax breaks for people funding their own social care.

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