Welsh care services at 'risk of collapse' due to National Living Wage

Welsh care providers and social services directors are urging the Welsh Government to take urgent action and increase funding for care, warning that the National Living Wage being introduced in April could put care services at risk of collapse.

Following the budget announcement for spending plans in Wales, the Association of Directors of Social Services Cymru (ADSSC) and National Provider Forum (NPF) have written to Welsh ministers to underline concerns around the future viability of social care provision in Wales.

Whilst the recent budget reductions in Wales are smaller than anticipated, the settlement does not reflect cost pressures faced across the sector, according to the ADSSC and NPF.

Dave Street, vice president of the Association of Directors for Social Services Cymru (ADSSC) said: “Without increased funding combined with innovative solutions, the only way councils in Wales will be able to cope with increased costs from the National Living Wage is by commissioning fewer services.

“Fewer commissioned services will cause considerable distress for people who use care services and their families, lead to providers leaving the sector, increase pressure on NHS services and provide uncertain employment prospects for a significant number of trained and committed care workers.”

Auriol Miller, director of Cymorth Cymru, added: “The threats posed by the National Living Wage are not just confined to the care sector. Learning disability providers are facing a very bleak future without support, but all providers offering 24-hour support services are at significant risk. Our members have warned that unless urgent action is taken, some services are at risk of collapse this year, leaving many vulnerable people and their families with nowhere to turn.”

The ADSSC and NPF claim that the care sector in Wales will be particularly hard hit by the requirements of the National Living Wage because the vast majority of care provision is paid for by the public sector, which has already seen budgets severely constrained in recent years. It is also a sector where around two-thirds of costs are based on staff costs.

The ADSSC and the NPF have put forward a number of potential solutions. Principally, Welsh Government is urged to increase funding to reflect the importance of the sector to the people of Wales and to the wider health and care system. In addition, more should be done to assist local authorities in applying procurement practices consistently and proportionally, with uniform standards and quality thresholds for commissioning.

The National Living Wage comes into force from April 2016 for workers of 25 and over, initially paid at £7.20 an hour and increasing to £9.00 an hour by 2020. This will replace the current National Minimum Wage, which is paid at £6.70 an hour.

See more at https://www.gov.uk/government/publications/national-living-wage-nlw