National Living Wage: Social Care

Debate between Lord Oates and Lord Prior of Brampton

Thursday 5th May 2016 Lords Chamber

[Lord Oates]

To ask Her Majesty’s Government what assessment they have made of the effect of the national living wage on providers of social care.

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

My Lords, across the sector higher productivity, staff retention and better-quality care will benefit employers and care home residents. The national living wage rewards the valuable contribution made by care workers. Out of an estimated 1.52 million adult social care jobs in England, up to 900,000 people are expected to benefit. The department continues to work in collaboration with care providers and commissioners to support effective commissioning, recruitment and retention in adult social care.

--- Later in debate ---

[Lord Oates (LD)]

I thank the Minister for his response, but it is a response rather than an answer. Is he not conversant with the BBC research published yesterday, showing that there are 5,000 care homes at risk of closure over the next three years, the recent Moore Stephens report, showing a 34% increase in care home insolvencies over the past three years, or indeed the LGA estimate of a £2.9 billion funding gap in adult social care by the end of the decade? In the face of these figures, why do the Government continue to assert the incredible proposition that it is possible to increase wage costs and regulatory burdens but not increase real-terms per capita funding? When will they end this dangerous fantasy and start addressing the serious crisis in adult social care?

[Lord Prior of Brampton]

My Lords, the increase in the minimum wage from £6.70 to a living wage of £7.20 has been universally welcomed, I think, including by most Members of this House. Care workers and people who work in care homes do an incredibly difficult job and £7.20 does not seem a small fortune to pay them. It will increase the costs for people in the care sector and there is some evidence that some care homes are closing. The figures I have are that in the past two years 2,000 beds have closed in the care sector, but during that time 600 domiciliary care agencies have opened—so I think that there is going to be a switch in the way that care is delivered from residential care to domiciliary care.