GMB Welcome New Mandatory National Living Wage But Warn That Additional Funding Will Be Required To Meet Staffing Costs In Care
Without the significant extra funding needed in the social care sector, the extra strain put on care homes and domiciliary care will be disastrous says GMB.
GMB commented on the new mandatory National Living Wage coming into force. From today, Friday 1st April 2016, employers will be required to pay workers aged 25 and over a minimum of £7.20 per hour. (See notes to Editors for previous GMB press releases about the living wage).
Workers aged 24 and under will still be paid according to the national minimum wage with 21 to 24 year olds being paid a minimum £6.70 and 18 to 20 year olds receiving a minimum of £5.30. Minimum wage rates for under-18s and apprentices are £3.87 and £3.30 respectively.
The announcement of the National Living Wage in July 2015 followed major cuts to tax credits which, GMB assessed, would leave 2.62 million workers with a minimum loss of £23.72 per week and that over time that the average loss would be about £34 per week for 3.3 million working families.
The new living wage is likely to have a beneficial effect for individuals working in social care, a sector that has been repeatedly singled out for the amount of workers paid close to, or in some cases even below, the national minimum wage.
However, local councils, along with GMB, have warned that increased staffing costs may push social care to breaking point requiring additional funding to combat the increased expenditure, an increasing demand for services and the £5 billion already cut from social care funding.
Tim Roache, GMB General Secretary, said “GMB welcomes the move towards fairer wages for workers but without the significant extra funding needed in the social care sector, the extra strain will be disastrous.
Younger workers, meanwhile, have been ignored yet again due to this government’s refusal to equalise National Minimum Wage rates with the new National Living Wage. It is patently unfair that young people in work face lower wages compared to older workers in the same jobs and GMB will continue to campaign for equal pay for equal work.
Perhaps most concerning of all is news of unscrupulous employers like B&Q finding ways of depriving workers of the pay increases they are are entitled to through changes to their terms of employment, in some cases leaving workers even worse off than they were before
GMB believe in a benefit-free, living wage of £10 per hour and we will continue to campaign for this for all GMB members."
Contact: Lisa Johnson on 07900 392228 or Justin Bowden on 07710 631351 GMB press office on 07739 182691 or 07970 863411
Notes to Editors
1 GMB press release dated Wednesday, November 11, 2015
GMB Welcome Independent Report Setting Out Extent Of Crisis In Care Homes
It is one minute to midnight for the care sector and as our warnings that Southern Cross would collapse were ignored again and again history looks set to repeat itself unless George Osborne acts now says GMB.
GMB, the union for staff in the care sector, welcome the report into the crisis in the care home sector published today (11th November 2015) by The ResPublica Trust which is an independent non-partisan think tank.
A pdf copy of the report is set out at the foot of this release. The text of the press release from The ResPublica Trust is set out here.
“CRISIS IN CARE HOMES WILL COST THE NHS £3 BILLION
The NHS faces a £3 billion bill as residential care homes shut their doors forcing hospitals to care for the elderly, according to a report from the independent think tank ResPublica.
In The Care Collapse: The imminent crisis in residential care and its impact on the NHS ResPublica says within 5 years residential care homes could lose a staggering 37, 000 beds meaning the NHS would have to find extra billions to care for those patients who are no longer in care and can’t go elsewhere.
The authors say the looming crisis has echoes of the 2011 collapse of Britain’s largest care homes operator, Southern Cross Healthcare, which ran 750 care homes.
Director of ResPublica, Phillip Blond, said: “When Southern Cross failed the private sector stepped in and cared for those left homeless. Now, however, with the sector losing money for every funded resident there is no provider of last resort. We fear the worst case scenario is the most likely, that these residents will flood our local general hospitals costing £3 billion per year by 2020.”
ResPublica predicts the National Living Wage, which will be brought in on 1st April 2016, will also cause significant financial harm to the residential care sector.
The report says by 2020/21 the residential care sector will need an extra £1.1 billion to meet demand. £382 million, or one third of this figure, will be for the rise in staff pay because of the National Living Wage.
Staff costs are estimated to be between 60-80% of the total cost of caring for a patient in a residential home.
Report author Emily Crawford said: “The National Living Wage is a great step forward. It is estimated it could help more than 6 million low paid workers. But for the care sector, which is heavily reliant on its labour force, it could be catastrophic.”
“By 2020/21 we predict that a third of the funding gap will be because of the rise in the cost of paying staff the National Living Wage.”
Mr Blond added: “The National Living Wage must be brought in. It is essential working people are paid a proper wage. At the same time it will damage the residential care sector which is already under extreme pressure and it could collapse as a result.”
In a detailed analysis authors outline a number of other significant factors in this crisis including:
*An Ageing Population: Over 65s make up about 18% of the population. This is set to rise to 25% by 2050. Nearly 10% of the population is over 75 years old.
*Acute Conditions: 70% of the total health and care spend, in England, is on long term conditions meaning 30% of the population accounts for 70% of the spend.
*Spending Cuts: 90% of local authorities now only provide funding for older people with ‘substantial’ or ‘critical’ needs. The result of this has been that the number of over 65s getting public money for social care has fallen by 27%.
Report authors say a fundamental shift in the way residential care is commissioned and paid for is needed.
Backing the report Justin Bowden, National Officer for the GMB union, said: “It is one minute to midnight for the care sector. Just as GMB warnings that Southern Cross would collapse were ignored again and again by government, history looks set to repeat itself unless George Osborne acts now. This time however we are not just talking about the largest care home provider collapsing, but the entire publicly funded care home and domiciliary care sectors.
“This is not some unexpected, overnight phenomenon catching everyone unawares, this has been a slow motion collapse and somebody's mum or dad or granny - our elderly and vulnerable - will be the biggest victims.
“Local authorities are unable to act as 'lenders of last resort' and step in, so the NHS will be forced to try and fill the giant hole created by 37,000 less beds in the care sector for our elderly and vulnerable - equal to 28% (or 1 in 4) of all available NHS beds. The effects will be immediate and crippling."
Dr Chai Patel, Executive Chairman HC One the UK’s third largest care provider, said: “Our care staff do an incredible job day-in day-out and deserve the Living Wage, but it must be properly funded. This report shows that unless the Chancellor takes urgent action to address this looming crisis, tens of thousands of older people will lose their homes and be forced into the NHS.
“Southern Cross was a failing company, what we are facing now is a failing system. At a time when the Baby Boom generation is beginning to retire, and look ahead to their long term care needs, there are huge fears that the homes to care for them simply won’t exist.
“We must protect the homes of vulnerable older people, and our NHS, by ensuring they are properly funded for the future.”
2 GMB press release dated 2nd November 2016
GMB Welcome Unilever Signing Up To Living Wage Which Increases By 40p To £8.25 Per Hour In Rest Of UK And By 25p To £9.40 Per Hour In London
That a living wage of £9.40 per hour for London is already 40p higher than the £9 George Osborne is planning for 2020 shows what a sham Osborne’s living wage policy is says GMB
GMB commented on the announcement that a living wage should be raised by 40p per hour from £7.85 per hour to £8.25 across the UK and by 25p per hour from £9.15p to £9.40 in London. See notes to editors for copy of the story on Press Association.
GMB, the union for Unilever workers, also welcome the announcement that Unilever has achieved accreditation as a Living Wage Foundation employer covering its entire UK workforce. See notes to editors for copy of Unilever press release dated 2nd November.
Paul Kenny, GMB General Secretary commenting on increases in living wage said "That a living wage of £9.40 per hour for London, unveiled by Mayor Boris Johnson, is already 40p higher than the £9 George Osborne is planning for 2020 shows what a sham Osborne’s living wage policy is.
George Osborne is using this sham policy as a cover to take away tax credits from the lowest paid workers in the country. How did he think that he could get away with taking £30 per week off these working families? ".
Stuart Fegan, National Officer for GMB members in Unilever, said "This announcement comes after a coordinated campaign by our stewards and members of lobbying senior management within Unilever on adopting a living wage (as set by the Living Wage Foundation).
GMB warmly welcome the announcement that Unilever have gained accreditation with the Living Wage Foundation which will mainly benefit not the directly employed workforce but those workers that work for Unilever through its supply chain.
GMB supports the work of Living Wage Foundation to raise wages. We will continue to make strong representation to Unilever and all other multi international employers to ensure the just treatment of members working for employers in supply chains.
GMB will continue to press for a living wage to be set at £10 per hour as agreed at GMB Congress. Members make clear in their experience you need at least £10 an hour and a full working week to have a decent life free from benefits and tax credits. Less than £10 an hour means just existing not living. It means a life of isolation, unable to socialise. It means a life of constant anxiety over paying bills and of borrowing from friends, family and pay day loan sharks just to make ends meet."
GMB press release dated Wednesday, September 30, 2015
Additional 20p On National Minimum Wage For 1.4 Million Workers Is Welcome But £6.70 Per Hour Is Not A Living Wage Says GMB
On tax credit cuts from April 2016 for 2.62 million workers the minimum loss will £23.72 per week and the average loss will be £34 per week for 3.3 million working families says GMB.
GMB commented on the increase in the national minimum wage. See notes to editors for new rates from 1st October 2015.
Paul Kenny, GMB General Secretary, said “The additional 20p per hour for 1.4 million lower paid workers is welcome but as the Chancellor recognized £6.70 per hour is not a living wage. Employers like NEXT who can afford to pay a living wage should do so without delay.
The Government must also step up enforcement and enable trades unions and local councils to contact HMRC to report employers who are not paying the rate.
These same workers and their families face a serious loss of income from 1st April 2016 when tax credits are cut. GMB assess that for 2.62 million the minimum loss will £23.72 per week and that over time that the average loss will be about £34 per week for 3.3 million working families.
For the huge numbers of working families that will be hit by cuts in tax credits the answer is simple – they should join a union to fight for better pay from employers who can well afford it as Osborne confirmed."