National Living Wage: Social Care

Baroness Smith of Newnham Excerpts

Thursday 5th May 2016 Lords Chamber

[Lord Prior of Brampton]

The noble Baroness is absolutely right. Our whole focus must be on the residents of these homes rather than the owners. There are a number of very highly leveraged providers in this sector, which have high levels of debt—often very expensive debt—for historical reasons. The CQC is keeping a very close watch on them. When there are early-warning signs of difficulties, the CQC and the local authorities will put in place alternative plans.

[Baroness Smith of Newnham (LD)]

My Lords, talking to a charity recently I was told that some care homes have already raised fees by £100 a week since the introduction of the national living wage in April this year. What plans do the Government have to look at the relationship between the cost of care homes and the cost to the individual of the economic viability of care homes, in light of the fact that the target for 2020 is to have a national living wage of £9? We need social care and care homes to be economically affordable.

[Lord Prior of Brampton]

The living wage will go up over this period of time. The better care fund and the social care precept will of course go up, too, over this period. Clearly there will be some fee increases. Local authorities have an obligation under the Care Act to have a sustainable and diverse market in their area. There will be fee increases to private providers but the main squeeze—the main concern which we in this House should have—is over local authority-funded care.