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‘Crisis in social care funding has pushed the sector to the brink’

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Labour MP for Redcar Anna Turley today criticised the government for failing to get a grip on the social care funding crisis which is placing unsustainable pressure on local authorities in the North.

Speaking in a Westminster Hall debate on care homes in England, Anna warned of a substantial social care crisis in the North East where there are greater demands for state residential care and fewer self-paying homes.

According to sector analysts, LaingBuisson, the care home sector is closing more beds than it is opening for the first time since 2005, with a net loss of 3,000 across the UK last year. The homes most at risk are those dependent on local authorities, who are in turn reducing their care fees under budgetary pressures.

In the debate, Anna said:
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“In the North East, only 18% of people requiring care are self-paying, compared with 54% in the South East. In Surrey, by contrast only 1% of people in residential homes are paid for by the state.

The Care Home market is highly polarised between lucrative self-pay homes mostly in South East England and those with local authority residents which are struggling.

Crisis point will be reached shortly as demand continues to increase as spending is drastically cut back. The government’s Care Bill will further increase the burdens on councils in England. The only place where providers can make any money is by cutting services and by squeezing workers’ pay and conditions.”

Anna also highlighted the pressure on care staff who are bearing the brunt of funding pressures with reduced terms and conditions, greater workloads, and many in effect paid below the National Minimum Wage.

She said:

“In care homes non-payment of the National Minimum Wage is driven by a failure to pay for actual hours worked, such as staff not being properly recompensed by overnight sleep-ins or time spent training, or to pay for uniforms or deducting money for accommodation that does not form part of an employment contract.

“Vacancy rates and staff turnover are high across the sector. Councils are struggling to retain social workers in the face of high caseloads, a blame culture and competition over pay. High turnover has damaging implications for the continuity and quality of care.

“The government’s crisis in funding for care homes has pushed the sector to the brink. Terms and conditions for the workforce are being squeezed and the current funding structure for local authorities is simply unsustainable. The government must get a grip.”

 

Full text of Anna’s speech in the Westminster Hall debate:

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Thank you – it is a pleasure to serve under your chairmanship. I would like to thank my honourable friend for Hove for bringing about this important debate this afternoon with his customary determination to tackle the important issues and his concern for the most vulnerable in society. Older people deserve the right to live with dignity and decency. All too often this is not the case. And the situation looks set to get worse.

86% of all care home places are run by the private sector, for profit. Local authorities are the largest single purchasers of these places across the country. Due to intense budgetary pressures, local authorities have reduced their fees by an average of 5% between 2010/11 and 2015/16. According to sector analysts, LaingBuisson, the care home sector is closing more beds than it is opening for the first time since 2005, with a net loss of 3,000 across the UK last year.

In the North East we expect to have a substantial crisis in social care as a result of this government’s failure to grip the issue. As has been said by my Hon Friend, the homes most at risk are those dependent on residents paid for by local councils at rates far below those paid by self-funding residents: proprietors say rates are actually below break-even point.

In the North East, only 18% of people requiring care are self-paying, compared with 54% in the South East. In Surrey, by contrast only 1% of people in residential homes are paid for by the state.

The Financial Times has noted that the Care Home market is highly polarised between lucrative self-pay homes mostly in South East England and those with local authority residents like Redcar & Cleveland which are struggling.

Given this disparity between Surrey and areas like mine, and since the crisis is NOT a crisis of funding residential care but IS a crisis of funding for state residential care, the market will probably NOT collapse nationally but will fall over in those areas where the state is the main payer such as mine.  So if a major provider struggles, it is likely to mean that they close their homes in the north but not the south.

There is no capacity in local government to ‘take over’ these homes. Any private sector supplier that did so would be taking an unsustainable risk because they are a loss making business. As of this moment there is no plan B for the Government they just think it is not going to happen.

Crisis point will be reached shortly as demand continues to increase as spending is drastically cut back. The government’s Care Bill will further increase the burdens on councils in England. The only place where providers can make any money is by cutting services and by squeezing workers’ pay and conditions.

The government’s Comprehensive Spending Review in December 2015 has given councils the option of adding a social care precept of up to 2% to annual council tax bills to raise extra money to pay for adult social care.

However the precept will raise at best £2bn by 2020, against a predicted funding gap of closer to £8bn. Indeed the Kings Fund estimates that at best the precept will raise £800m.

But I want to use this opportunity to raise some of the contributory factors to this crisis I believe the government needs to address.

Firstly, the Care Workforce & the National Minimum Wage Compliance

The Resolution Foundation have estimated that care workers (both care home and homecare) are already collectively cheated of £130m a year due to sub National Minimum Wage pay. This is driven by chronic underfunding of the care sector, poor employment practices, poor commissioning practices and ineffective enforcement of the National Minimum Wage by HMRC.

One employer has put a set of proposed changes to terms and conditions in order to prepare for the introduction of the National Living Wage.  The proposals include:

•             Withdrawing all Bank Holiday and overtime enhancements

•             Removing contractual sick pay

•             Scrapping meal allowance when eating with clients

•             Asking workers to pay for their own registration with the ‘Barring Service’

•             Enforce 8 hours p.a. unpaid training time

•             Introduction of new duties

•             Plus changes to duties

In care homes non-payment of the National Minimum Wage is driven by a failure to pay for actual hours worked, such as staff not being properly recompensed by overnight sleep-ins or time spent training, or to pay for uniforms or deducting money for accommodation that does not form part of an employment contract.

The Financial Times has said ‘businesses that run care homes for the elderly are at risk of going bankrupt, especially those reliant on revenues from local authority funded places, from a double blow of the imminent increases in the minimum wage and tighter immigration rules, making it harder to recruit from overseas’. It is this second issue to which I would like to turn next.

The care sector is also particularly dependent on migrant labour. The latest estimates suggest that just over 18% of the workforce are non-British.

UNISON has highlighted a particular problem in the care home sector with regards to the treatment of migrant workers. In a recent roundtable event one group of Filipino workers reported that they were paying £300 a month each to share a flat with only one toilet and no lounge at the residential care home they worked at. The rate paid for the work they did was £7.02 per hour, but there were then monthly deductions for their uniform (they got one per year but had to pay every month) and training (a breach of National Minimum Wage law). This would normally cost more than £200 a month, and it transpired that these workers were not necessarily getting the uplifts in the minimum wage they were entitled to. The roundtable also heard that a working week for these staff could sometimes be as high as 60 hours, depending on staffing levels, despite the fact they were contracted for 36 hours. They could also find themselves working a 10 hour nightshift for a paltry £35, way below the minimum wage, and with no sleeping permitted. The employer extorted £500 each from this group of workers as their initial five-year period in the job came to an end, on the basis that payments were needed to retain a licence to hire foreign workers and to protect their immigration papers. The staff were subject to body searches before meeting the employers. To compound matters, they were then obliged to pay fees of £2,000 each for a solicitor to renew their work permits, in cash. The work permits are with this one employer, so if the workers lose them they would lose their visa and have to leave the country.

The exploitation of immigrant workers is not only immoral but it drives down terms and conditions across the sector for all workers and reduces job opportunities for local people.

Wider problems in the care home sector

The social care workforce is predominantly female, with the latest estimates suggesting 82% of care workers are women (with a broadly similar percentage across all types of care). Social care is a highly gender segregated sector, with low pay and poor conditions reflecting the historic undervaluing of what is deemed to be “women’s work”. Compared to other sectors, the workforce is also particularly concentrated in the 45-60 age bracket. Government-backed attempts to move away from this disproportionately middle-aged demographic have floundered, largely on the basis that the quality of work, pay and conditions are simply not attractive enough to bring in younger staff.

Residential care tends to be based on shift work and there are often problems around short staffing with care workers called on at short notice to cover shifts. This can be particularly problematic for night shifts, where the compensation is often insufficient. There may also be pressure from care providers to work beyond a 48-hour working week.

Vacancy rates and staff turnover are high across the sector. Councils are struggling to retain social workers in the face of high caseloads, a blame culture and competition over pay. High turnover has damaging implications for the continuity and quality of care.

There is no English language requirement for those care workers for whom English is not their first language. The overall level of training and qualifications across the care sector is low. There are expectations of induction training for staff but the nature and quality varies considerably. There is less training available in outsourced services with particular concerns about agency staff not receiving training. There are increasing expectations for care workers to carry out medical treatments previously the preserve of nurses or other NHS professionals, but no concomitant expansion in training.

There are no longer any universal standards for providers to meet benchmarks for percentages of trained staff in their workforces, and with no obligations it makes no business sense for providers to do this voluntarily due to the high turnover of staff. There is also no central quality assurance mechanism for training, leading to a lack of faith in qualifications and no incentive for many staff to get trained. Funding cuts are reducing access to training. There have been particular problems in the community and voluntary sector.

Care workers report a worrying lack of training on important issues such as food hygiene and infection control. Some staff are able to start work with no CRB checks and some companies will not even take up the offer to their staff of free first aid training. There are some disturbing failures to adhere to basic health and safety rules.

There are very few opportunities for career progression for social care staff other than becoming a supervisor or line manager. Senior care worker roles are becoming less common as funding is cut, and squeezed pay differentials mean there is little return for someone gaining such a role anyway. Career progression has become even more limited as providers have cut costs by stripping out management and supervisory levels. For direct care workers there is no supported route to progress to professional qualifications in social work, occupational therapy or nursing. Many UNISON members report an aspiration to get a job in the NHS as a healthcare assistant where they can access higher pay with pay progression and opportunities.

The government’s crisis in funding for care homes has pushed the sector to the brink. Terms and conditions for the workforce are being squeezed and the current funding structure for local authorities is simply unsustainable. The government must get a grip.

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