The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
The LGA estimate that Councils will need to find a further £330 million to fund social care to ensure providers can pay the Living Wage from an already shrinking budget. The Resolution Foundation estimate an even greater challenge. They estimate care-providers who would already have had to find £1bn to pay for increases in the minimum wage over the next five years will now face an additional bill of £1.3bn by 2020. So what will be the impact:
- Providers will be looking to renegotiate contractual terms with local authority commissioners to ensure sufficient funding to pay eligible staff the living wage from April 16 and to cover future increases. Unless further funding is earmarked for social care this is going to lead to some pretty difficult negotiations and local authorities may find they are constrained by EU procurement rules.
- The policy announcement didn’t seem to account for the fact that, in the social care world it is the Government who will ultimately pick up the bill. Expect some serious lobbying pushing the Government to increase investment in social care.
- Those providers who already pay staff £7.20 or more may have a competitive advantage and will want to be picking up work from other organisations who haven’t already got a business model that helps them deliver.
- Finance Directors will have been busy doing their sums to see how the Living Wage will play out over the coming years. We expect that for some providers this may be the final nail that means they decide to get out of the market, or certain parts of it, or to look for a merger partner to take advantage of economies of scale.
- Age may become a driving force in recruitment, undermining the need to focus on values to recruit staff who will deliver high quality care.
We will be commenting on the New Living Wage as it unfolds. For more detail on the new policy see our briefing here.
For more information
Contact Matthew Wort.
The government announced on 16 May that it will provide a fund of £400m to cover the costs of removal and replacement of cladding to high rise residential blocks which have failed tests.
Whilst some people are under the impression that preparing a Lasting Power of Attorney (LPA) is simply a case of completing a form and ticking a few boxes, it is about far more than this.
A big fear for some people facing divorce and the inevitable carving up of the matrimonial assets. They seek assurances that such assets will be “ring-fenced” and retained for them.
Thinking about the legal status of being a cohabitant probably isn’t at the top of the ‘to do’ list.
When an individual is thinking about making a gift to another individual, consideration needs to be given to the Potentially Exempt Transfer (PET) trap.
We are now only a few weeks away from the biggest change to data protection laws in over 20 years. Are you compliant?
The tragedy, in this case, is that there were options readily available to the midwives that they could have used. This was not a case of having to go above and beyond.
Arising from the recent Family Division announcement, people who think they are legally divorced may in fact still be married.
The SCCS has issued providers in the scheme a series of updated and new documents in order to assist with their National Minimum Wage review.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.