Question

To ask the Secretary of State for Business, Innovation and Skills, with reference to the contribution of 13 January 2015 by the Parliamentary Under-Secretary of State for Business, Innovation and Skills, Official Report, columns 218-22WH, on care sector, what discussions his Department has had with the Department for Communities and Local Government and the Department of Health on the effect of commissioning decisions by local authorities on the level of compliance with the national minimum wage in the care sector; and if he will make a statement.

The Government is taking action to improve compliance with the National Minimum Wage (NMW) in the social care sector. We are working closely with the Department of Health, Communities and Local Government and HM Revenue and Customs (HMRC).

Over the period 1 April 2011 to 31 March 2013, HMRC have made enquiries into 224 employers in the social care sector. Over half of these were paying less than the minimum wage between them owing £1,319 729 arrears of pay to 6550 workers, with penalties issued with a total value of £146,931. There are 94 investigations currently underway in the social care sector.

The Department of Health have recently published statutory guidance for local authorities as part of the package of secondary legislation to accompany the Care Act. The chapter of statutory guidance on commissioning and market shaping explicitly states that local authorities should have evidence that contract terms, conditions and fee levels will not compromise care providers’ ability to pay at least minimum wages.

The Department of Health is asking all Local Authorities to sign up to the Social Care Commitment which incorporates a statement about employer compliance with minimum wage legislation. The Association of Directors of Adult Social Services has written out to all its members encouraging them to support the Commitment as a way of raising standards in adult social care.

The Department of Health is also working with the Association of Directors of Adult Social Services (ADASS), the Local Government Association (LGA) and the Health Services Management Centre at Birmingham University to develop as set of Commissioning Standards. Local authorities will be encouraged to use these as a benchmark to support them to improve commissioning practices, including those which have an impact on the social care workforce such as employer compliance with National Minimum Wage.

In addition to the actions we are currently taking to reduce non-compliance in the social care sector, we will also be:

• issuing guidance to employers so that they understand the NMW law, including tips to avoid common mistakes and the records that they should be keeping to prove that they are paying their workers correctly.

• encouraging care sector workers who have been underpaid to make a complaint- making sure that they understand their entitlement.

HMRC have started work on new targeted enforcement work in the care sector.

Any worker who is concerned that they have not received what they are entitled to should call the helpline on 0800 917 2368. HMRC follow up every complaint.