Care homes cannot afford to pay staff more on existing budgets

Posted on September 1st, by geoff in CT blog. 7 comments

By guest blogger DAVID WATERS

Chair, Howden Care (CHIS and PrimeCare)

Care home companies are not just ‘crying wolf’, they are already in serious financial trouble. George Osborne’s new living wage is a fantastic idea, but will inevitably push many to breaking point financially if changes are not made to the way care is funded.

Care is a minimum wage industry and profit margins are extremely tight, especially for state-funded business. Local councils continue to slash budgets and costs such as utilities, food and insurance are rising. Care homes simply cannot afford to pay staff any more on existing budgets.

Change is needed, but nobody seems to want to have this conversation. We need to pay our care workers a wage which recognises the arduous tasks they do for us in caring for vulnerable members of society. If more people are prepared for long-term care earlier could they self-fund? Could the Government extend state pensions on this basis and allow top-up fees in a managed manner, rather than forcing care homes to charge for ‘additional services’? Could long term care funding be provided by banks and insurers, payable only when someone needs it? Should social and health care be joined together?

The Government needs to implement the recommendations of the Dilnot report and ensure vulnerable members of society are adequately funded for their care needs. The care industry is in a desperate situation financially. Change is required if we are to safeguard its future and the future of vulnerable members of society in need of social care. Otherwise these vulnerable people will find themselves at A&E units across the country and the State will incur the NHS costs, which are about seven times higher than current social care costs.

  • The CT Blog is written in a personal capacity – comments and opinions expressed are not necessarily endorsed or supported by Caring Times.

7 responses to “Care homes cannot afford to pay staff more on existing budgets”

  1. If care providers dependent on local authority funding, who are therefore already under severe financial pressures in many parts of the country, are going to be barred from pulic sector contracts in future if they do not pay (or are unable to pay) the national living wage, I’m concerned that this will drive more away from the public sector and towards self-funders. What happens to people who are unable to fund their own care?

  2. Tony Stein says:

    All true and as someone tasked with helping many of the operators that are financially stretched the problem is far greater than many imagine.
    I just would take up a couple of points.
    Firstly I absolutely believe that it’s commendable to try to make people on NMW better off. I completely disagree that raising the NMW is helpful. When affordable housing is in short supply, any additional income simply goes straight into the pockets of landlords or property owners. People are no better off but as ever, the already wealthy get wealthier. Unless more affordable housing is made available or rent controls etc are put in place then increasing pay does nothing to make those on low pay better off. I suspect that the government know this but it’s hardly a vote winner to say so!
    Secondly, I’d raise the issue of the cost of care. The most common complaint that we hear from commissioners and the regulator is that there are insufficient staff in the homes. The most popular ‘activity’ for our residents is talking and combatting loneliness by having the time to stop and chat is a key issue. Those services where staff make the time to talk then have the problem of trying to find time to fill in all of the interminable amounts of paperwork. It’s a no-win. Do you answer call bells assist the client and stop to treat the client like a person, or, complete the task and run back to ensure the MAR chart or care plan is completed accurately and to the satisfaction of the Regulator to avoid a “Requires Improvement”?
    No cost of care calculator that I’ve ever seen incorporates time for staff to simply chat – it’s all about meeting needs. Thus, there’s a disconnect between what we’re paid for and what we’re judged on.
    Not sure how we fix this one!

  3. Spot on Tony,

    Anyone whose done A-Level economics can work out that raising the minimum wage is a lever that causes all sorts of reactions in the economy.
    However, I have lost count of the times that a chief exec. or similar has stood up at a conference and paid sincere tribute to care workers, describing their job as ‘something I doubt I’d be able to do’.
    A good care worker must have a broad skill set, be willing to work shifts, be able to show a degree of of self-abnegation in many work situations, have the patience of a saint, be prepared to perform a number of frankly distasteful tasks with a sensitivity which preserves a person’s dignity, must have diplomatic skills in dealing with relatives and resident/resident conflicts, be observant and sensitive to non-verbal communications, be compassionate and keep a good sense of humour, have a high level of integrity, be the soul of discretion and be a stalwart and fearless advocate for their residents.

    No, raising the minimum wage is not the answer, but improving the remuneration of care workers is an imperative if social care is to be something which society can be proud of.

    (And I think I’ve found my topic for next week’s blog!)

  4. I was very worried about Cameron’s levels of awareness when he put a wind-turbine on his house roof that would never pay for itself and without planning permission but, I thought, maybe he is politicking in the general interest. However, his plan to heavily fine bosses who don’t pay the Living Wage has confirmed he is totally out of touch with reality and his direct knowledge of horses should enable him to be certain that one should ‘put the horse before the cart’ in all circumstances, for any useful effect to occur.

    Logic dictates two things to me on this subject:-

    1. Buy to let landlords are the disproportionately tax-efficient recipients of the funds (rents) that are invested in capital-appreciating residential property and that appreciating capital should be a duly taxed main source of elderly care funding.

    2. Cameron’s evinced disappointingly narrow education has resulted in a Prime Minister who should be removed from that role, together with George Osborne as soon as possible.

    To threaten such an attack on bosses who are plainly doing their level best to manage and support care is no less than a betrayal of their efforts.

  5. John Burton says:

    Of course good care workers in good care homes should be paid at a level commensurate with their skills and tasks, and that does put the price of care up. But I believe we could pay more AND reduce costs if we care workers were given more respect, responsibility and value, AND we cut out all those costs that have little to do with the core task of good care.
    So, support, train, trust and value your team and encourage them to take on the whole job, You will find that there is less sickness and other absence, less need for “management”, fewer disciplinary issues, “safeguarding”, and complaints, less turnover of staff, more commitment and, of course, better care.
    But, at the same time, we have to get the bureaucracy off the backs of providers, managers, staff and residents. Led by the regulator, care home bureaucracy has ballooned out of all proportion to the task, resulting in all sorts of other costs and obligations which are irrelevant to a good care home. Think of the costs that spiral every time the regulator changes its demands. Think of the armies of “quality” managers and consultants, the near useless training courses that staff have to be put through, the “compliance” companies, the endless new procedures and policies raining down on us. The costs are crippling financially and, far from improving care, the regulator and all its hangers-on undermine the capability of good care workers to provide good care. Getting insurance through David’s business has to cost so much more than it would if providers were not under the threat of being tripped up by unnecessary red tape.
    Regulation and inspection is necessary but should be for the PUBLIC good. It has to be local, constant, and should be just about checking that the care is good enough. It has been made complicated and costly by a succession of good people who have built a self-serving, labyrinthine bureaucracy, spawned many others, and have forgotten what social care is all about.

  6. Roger Wharton says:

    Firstly I think Stephen may need to be cautious about taxing rental incomes and should be careful what he wishes for. Landlords are already taxed on capital gain so that side of it is taken care of and they pay tax income. Many, many landlords have second properties to produce the income they need for their retirement and this can keep them out of benefit dependency.

    The insurance market have already given their opinion on supporting private funders with a big thumbs down and this is one of the reasons why Dilnot has been put on hold. Delaying Dilnot will mean that care homes will continue to disproportionately charge high fees to balance the low state funded fee levels where they are exposed to Local Authority funding – something the Torbay Judicial Review considered to be wrong.

    With the DoH decision to reduce Nurse education and recruitment, the Home Office decision on EU Nurse recruitment and people generally becoming less interested in carrying the responsibility of Registered Manager position, the NLW, pension costs, CQC fees and the general costs of over regulation in the sector it is inevitable that many smaller business will be forced out of the market leaving an intense and unplanned pressure on Local Auhorities and the NHS.

    For once, I feel pessimistic about the future and worry that the very people the sector wishes to support will be sorely let down.

    • Bob Ferguson says:

      Roger, I think you’ll find that you have misinterpreted the Torbay JR judgement in respect of cross-subsidies. What was “wrong” was not the care home(s) charging such a level of fees, but the council taking those – and top ups – into consideration in the process of determining their usual rate.

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