National Living Wage: Social Care

Lord Hunt of Kings Heath Excerpts

Thursday 5th May 2016 Lords Chamber

[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.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I must say, it is very difficult to know sometimes what planet Ministers live on. That was an extraordinarily complacent answer. The survey yesterday showed that a quarter of all care homes are facing closure because of the financial squeeze. The Minister’s Government decided unilaterally to postpone—probably for ever but certainly for four years—the introduction of the Dilnot care cap. This proved massively disappointing to many people. The Government have put £6 billion into forward programme spending plans. Why not use some of that money to help the viability of the care home sector?

[Lord Prior of Brampton]

My Lords, if I sounded complacent, I did not mean to. I recognise that there is tremendous pressure on many providers of adult social care, particularly those funded by local authorities. It is for that reason that—disappointingly, frankly—Dilnot has been postponed. We wanted to bring in Dilnot but we decided that the cost of bringing it in was too great for local authorities to finance in the short term, although we are committed to doing it in the long term. The Government have allowed local authorities to raise a 2% precept and will be increasing the better care fund by £1.5 billion at the end of the period, bringing the total to £3.5 billion. It is a tough settlement—no one is making any bones about that—but tough choices have to be made.