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Minimum wage increase will push care homes ‘towards the brink’

3 min read

Labour MP, Peter Kyle, accuses the Government of having no plan to address the impeding social care crisis and calls for a commitment to dignity for all in later life.

Care homes are an absolutely essential part of our social care system, providing residential care and support to older people. Yet despite the fact we have an ageing population, with estimates that the number of people aged 85 and over will double in the next 30 years, the system finds itself in a perilous position and it’s clear the Government needs to act now to avert a crisis.

With a significant proportion of care homes funding coming from older people whose residential care is being paid for by their local council, care homes have felt the very real impact of the cuts to local authority budgets as many councils have reduced the amount they have paid per place.

This tight financial situation will be further exacerbated by the increases in the minimum wage from April.  Now I completely support the increases in the minimum wage, especially for the traditionally low-wage care sector. But without any additional funding for local authorities, it will only push care homes further towards the brink - A report from Respublica in November stated that an unfunded living wage could end up with the loss of 37,000 care home beds.

The Government will no doubt point to the ‘social care precept’ introduced in the Autumn Statement but this power to raise council tax by an additional 2% is a drop in the ocean compared to the additional resources needed. The Kings Fund have estimated that the funding gap for social care could be as high as £3.5billion by the end of this Parliament.

Now the majority of the press coverage has been about the state of the big providers such Four Seasons and speculation over their future viability but the 10 largest providers only account for around 25% of the market, the rest being proved by much smaller providers. In my constituency there is a small family run home I visited last year – the current manager was even born at the home! There are countless homes like this dotted around the country which are being pushed to the limit.

On top of all this, the national shortage of nurses is also hitting the sector hard, resulting in increased use of agency nurses which in some cases cost double the amount of permanent staff. The care sector had been with working with the Government’s Skills body UKCES to develop a new training scheme to create a career ladder into the caring professions but the project was abruptly axed in December just weeks before it was due to launch. I will be asking the Minister to think again and reinstate the scheme.

My concern is the Government has no plan to address these issues so that’s why I’ve called for this debate to give the Minister the chance to explain how the Government intends to address the issues.  If the Government truly is committed to dignity for all in later life, then they will heed the warnings from the sector and put in place a plan to secure the long-time viability of our care homes.

Age UK responded to Peter Kyle saying, "a care home of reasonable quality should be available to all who need it." Read more here.

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