Pennie Taylor spoke to care at home providers about how the introducing the Scottish Living Wage to all care staff will affect their business model
It is universally acknowledged that providing as much care as possible in a person’s own home is the ideal. It is what people in receipt of care prefer, what their friends and families want, and in Scotland it is the stated aim of government.
In 2011, the Scottish Government declared: “Our vision is that by 2020 everyone is able to live longer lives at home, or in a homely setting.”
The statement of intent continues: “When hospital treatment is required… there will be a focus on ensuring that people get back into their home or community environment as soon as appropriate, with minimal risk of re-admission.”
Laudable ambitions, driven by the need to address escalating pressure on the country’s hospitals, an ageing demography and spiraling cost. But without the resources to make it happen, our country’s 2020 vision cannot hope to be realised.
That is why a group of care at home providers from across Scotland gathered in Edinburgh recently to discuss the impact of the introduction of the Scottish Living Wage (SLW).
The Scottish Government has decreed that with effect from 1 October this year, all care workers should be earning a minimum of £8.25 an hour. Warmly welcomed by the care sector as a commitment to the dedicated people who provide hands-on care to help vulnerable people remain in their own homes, and endorsement of their value to the nation, the SLW also poses considerable affordability problems for employers – if it is not matched by government funding.
At the time of the roundtable, held on 19 September, less than half of local authorities in Scotland had agreed the rates they will use to purchase care from independent and voluntary sector providers. As a result, care at home providers faced funding shortfall and difficult – even distressing – choices.
Of the attendees at the United Kingdom Homecare Association (UKHCA) Scottish roundtable discussion, several expressed concern that without proper funding, services would have to close. One says she is already subsidising the care at home her clients receive from personal savings, and admits to being pessimistic about the future.
“These are systematically underfunded services,” she says. “I have been running at a loss, and I just don’t know how much longer I can continue doing that.
“I started the company because I could see there was a need for better home care, and I knew I could do it better. Now I am being driven into the ground because the funding to pay my care workers just isn’t there.”
They [the Scottish Government] announce headline-grabbing initiatives such as the Scottish Living Wage, then turn their back on the consequences
Most care at home in Scotland is provided by more than 60,000 individual care workers employed by a wide range of social enterprises, voluntary organisations, charities and independent companies. Some deliver round-the-clock care for people with extremely complex conditions, while others might make support visits throughout the day to people with disabilities and older people – many with dementia. Very few local authorities now deliver services directly, with most commissioning care agencies to do the work on their behalf.
It is these diverse care at home operators that feel let down. “Local authorities get bashed because they are the ones holding the purse strings, but ultimately it has to be the government that takes the blame for underfunding these vital services,” says one frustrated care at home provider.
“They announce headline-grabbing initiatives such as the Scottish Living Wage, then turn their back on the consequences.”
The Scottish Government has given local authorities £125m to meet the costs of the living wage and other funding pressures on social care. But anecdotal evidence indicates that it is not being passed on to those who have to pay staff wages – and even if it was it wouldn’t be enough.
Contract and tendering negotiations are tough and costly: ultimately, the councils and Integrated Joint Boards who are now responsible for commissioning all health and social care services in Scotland have been told not to use providers who do not pay SLW. Care at home providers are expected to absorb the shortfall.
People in need of personal and nursing care at home in Scotland can expect to receive it free if they have an income of around £23,000 a year, and 92% of care recipients fall into that category. Those who can afford it must self-fund or contribute towards the cost, and the introduction of the SLW plus inflation potentially represents a staggering 23% jump in wage costs for them in just one year.
“I can’t impose that on my private clients all at once, so I am taking a hit, running at a loss and introducing the uplift gradually over 12 to 18 months,” says one roundtable attendee. “When it comes to people in receipt of free care, I have no idea when I can hope to make ends meet.”
Some employers will look for ways to recoup the cost of the wage rise by slashing training budgets, or cutting travel time or holiday pay
Around 95% of the care at home workforce is female, and the majority is aged from 30 to 60. They are dedicated, highly-skilled care professionals who have traditionally not received adequate recognition for what they do to keep people living at home.
“We encourage providers to pay staff as much as they possibly can,” says a roundtable participant. “They are our biggest asset, our frontline, and so they ought to be our biggest investment.”
Far from what is described as the mopping and shopping tasks of yore, today’s care at home professionals are providing increasingly complex personal support to their clients. This may include PEG (percutaneous endoscopic gastrostomy) tube feeding, catheterisation, specialist end-of-life care and very complex medicine administration.
The SLW is intended to improve the status of the profession and drive up standards. However without adequate resources, some providers fear that the opposite may happen.
“Some employers will look for ways to recoup the cost of the wage rise by slashing training budgets, or cutting travel time or holiday pay,” says one of the care at home providers attending the roundtable. “That won’t be good for workers, or clients. But some commissioners will be turning a blind eye, if it means they get care on the cheap.”
The UKHCA members who gathered in Edinburgh to discuss the challenges affecting their sector would like to see registration of workers who provide care at home, as is the case in the care home sector. Similarly, they would like to see a national contract agreed for care at home. “Much more has to be done to ensure that standards are improving, and to monitor what is really happening,” says one. “Otherwise it will be the low-quality providers that survive while good operators go to the wall.”
The organisations represented at the roundtable are increasingly fearful that care at home providers are at risk of going out of business as a result of underfunding. Others are handing back unaffordable contracts, which adversely affects continuity of care for clients. All this has been brought into sharp focus by the introduction of the Scottish Living Wage, which is due to rise year-on-year.
44% of all social care in Scotland is provided by the independent sector. Perceptions of private providers can be skewed by high-profile profit-skimming scandals. Yet those who attended the UKHCA round table talked about operating on a 3% surplus margin – a level far lower than most viable businesses would be expected to achieve.
Mainly small and medium-sized enterprises these operators believe they could be important drivers of the Scottish economy, if they were given the right support. “And that means being prepared to pay a fair price for high-quality care at home,” says one small business owner. “We meet incredible resistance to acceptance that we do indeed offer the very best value for public money. But just look at the care inspectorate reports, client satisfaction levels, and performance data, and the evidence is there for all to see.”
As a rule of thumb, it is estimated that around 75% of operating costs relate to staffing, with 25% going on overheads such as office accommodation, IT support, insurance and administration. According to UKHCA calculations, the real price of paying the new £8.25 per hour minimum wage represents an £19.03 hourly rate, taking into account careworkers’ training time, travel time, pension and holiday pay plus necessary business expenses.
“Yet I recently sat across a desk from one council commissioner who suggested that I cut my costs by changing my heating supplier,” says one care at home provider. “That shows a complete lack of understanding of the pressure we are under right now.”
It requires investment of around £900 to recruit a care at home worker, and the employers hope that the SLW will attract more people in to the profession and promote retention. “But for that to happen, we need to provide services that are stable and viable and offer scope for advancement,” says one roundtable attendee. “Otherwise, those we employ will be out of a job, and our hospitals will be full of people who don’t need to be there but who can’t go home because the care they need isn’t there for them.”
And that would be a serious problem for all concerned.
