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Councils warned over low care payments

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Councils should be able to show that they are paying social care firms enough to pay their staff at least the minimum wage, including remuneration for travel time between appointments, the Department of Health has said.

Statutory guidance on the Care Act, which was passed last month, said councils should “assure themselves and have evidence” that their fees to care providers would not “compromise the service provider’s ability to meet the statutory obligations to pay at least minimum wages and provide effective training and development of staff”.

It said paying the minimum wage should also include “appropriate remuneration for any time spent travelling between appointments”.

In the guidance, the DH also warned councils not to act in a way that threatened the “sustainability” of the social care market.

It warned against “setting standard fee levels below an amount which is sustainable for providers in the long term”.

The warnings on fees came after the UK Homecare Association said that many councils were using their dominant position as care purchasers to push down prices.

Financial failure

The DH guidance also said that in the event of a care provider’s financial failure, councils had a “temporary duty” to meet the needs of those being cared for.  

“Local authorities must ensure the needs [of care users] are met but how that is done is for the local authority to decide,” it said.

The guidance came in response to the Southern Cross collapse in 2011. The firm’s unexpected collapse caused chaos for the councils whose residents lived in their homes, and instability for the 31,000 residents involved.

The guidance was published alongside a DH assessment of the costs of the Care Act. The impact assessment said all costs of the reforms would be “fully funded” by the government.

This included the extra cost of a universal deferred payments scheme, in which councils will pay residents’ care costs and recover the money from the sale of their estate.

This scheme will cost £108.5m in 2015-16 and £145.4m in 2016-17, falling every year to £21.6m in 2024-25, the impact assessment said. However, it added that there would be “monetised peace of mind benefits” of £37.4m in 2015-16 and £23.4m the following year.

The establishment of a national eligibility threshold for social care would cost £3m in “transition costs” and would have a recurring cost of £25.3m per year, it said.

It added that the new duty to support carers, introduced in the Care Act, would cost £47.4m in 2015-16 and £66m in 2016-17, rising to £165.1m by 2024-25. However, this would be outweighed by recurring savings and “monetised health benefits”.

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Readers' comments (2)

  • "Fully funded" Is that the opinion of local authority directors too? Most councils did not choose to turn a blind eye to abuses of the minimum wage provisions.

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  • You know there’s a problem with the financial implications when the equation includes £61m of “monetised peace of mind benefits”.

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