Articles

Care Providers Worried About Minimum Wage Rise

26/07/2016

The recent implementation of the National Living Wage (NLW) has seen the minimum wage for over 25’s rise by 50p an hour, from £6.70 to £7.20. While the Conservative government has lauded the increase as a success in its efforts to tackle poverty, some care providers have voiced their concerns that they might be driven out of business as their already slim profit margins will take a further hit.

The pay increase amounts to around £900 a year for full time employees, and this would mean a substantial increase in staffing costs for providers with large workforces.

The solution that care providers are proffering in Scotland is for government subsidies, although it is unlikely that the  £250m that has been budged for Scottish social care will stretch far enough to allow for this.

This amount is based on paying care workers £8.25 an hour, and this is the amount that campaigning group the Living Wage Foundation has been lobbying for. The Scottish government says it will give 40,000 people who are mainly women a pay rise.

Elizabeth Davies is a carer and welcomes the pay rise saying that it will help her to save for university, where she plans to study nursing.

"It means a lot because I'm going to university next year so the more I can save while I work the better it is for me. I don't have to live off of noodles", she says.

"You know sometime how you're like 'I really don't want to go to work tomorrow?' That was pretty much every day in retail and I never feel like that in this job ever, because I just love it - it's amazing.

"I'm a very people person, really patient, so it's definitely something suitable for me."

Her boss, Robert Kilgour of Renaissance Care said that his employees’ certainly deserved a pay rise, yet worried about his business’s future. This concern was echoed by Ranald Mair, the CEO of Scottish Care.

Mr Mair said: "Unless we get the funding of care on to a stable basis going forward, then there is, of course, the potential that people will say we simply cannot survive at this.

"It's the smaller players that struggle the most - wanting to do a good job for their staff but not being able to afford the increased bill unless we're successful with the government and the councils in improving the funding for care.

"People may decide, regrettably, that they can't sustain their position."