The New National Living Wage Pushing Care Services To Breaking Point – Expert Comment From My Family Care & Good Care Guide

From April 1st, the Government’s new National Living Wage will become law. This means that if you’re working and aged 25 and over and not in the first year of an apprenticeship, people will be legally entitled to at least £7.20 per hour – 50p more than before.

All employers will need to make sure they’re paying staff correctly – but what will the impact have on the care industry? The Local Government Association has warned that it could push care services to breaking point.

Care industry experts, Ben Black and Stephen Burke have the following to say, and are available to provide further comment or guest articles on the topic:

Ben Black, Director of Tinies (the nanny agency), Emergencychildcare.co.uk, Nannyshare.co.uk and My Family Care says:

“Carers generally, and nursery staff in particular, are some of the lowest paid people in the UK. There is no good reason for that. It’s an historical and societal mistake that needs correcting. The long term economic health of the UK is directly linked to the quality of care that children receive. If we want to get more graduates into the profession and make “care” a proper career, then we need to pay them more.

“Want to know why Scandinavia has a childcare system that is the envy of the world? It’s primarily because the staff are paid more and they have never bothered with the, slightly bizarre, separation between a childcarer and a teacher that the UK seems to insist on.

“Unfortunately, the wage increase will just add another layer of challenge and pressure to a childcare industry that is already creaking worryingly loudly. Funding streams are confused; the introduction of the 30 free hours is a disaster waiting to happen, and the only way to really fix the system is to embrace informal childcare (childminders and nannies) rather than concentrating on the relatively inflexible and expensive nursery sector. In that context, the net effect will be a simple increase in nursery fees across the board. Not great if you are one of the millions already struggling with high childcare costs.”

Stephen Burke, Director of Good Care Guide (www.goodcareguide.co.uk), the TripAdvisor style website for the care industry which is home to thousands of reviews of childcare and eldercare providers across the UK says:

“April is financial crunch time for providers of childcare and eldercare and for families using care. With staff their biggest cost, care providers face an overnight 10% increase in their bills to pay for implementing the National Living Wage and pensions auto-enrolment. Without any increase in funding from local authorities, providers will be forced to pass the extra costs onto families paying for care or to cut staffing. So it’s a lose-lose for families and those needing care.

“Even though many people, particularly women working in care, will gain from the National Living Wage, families face the prospect of higher care bills. Inevitably some care providers will not be able to fund the extra staffing costs and will be forced to close, particularly in more disadvantaged areas where families can’t afford higher fees for care.

“The care crisis is about to get a whole lot worse. If we really valued care, our society would fund it properly.”