Pay and pension plans will hurt care homes in the west

The arrival of the National Living Wage and auto enrolment pensions will make life more difficult for most West Country care homes. But less than half the region's care home owners are concerned about restrictions of migrant labour.

These are the main findings of a survey among 55 West Country care home operators conducted by the specialist care home team at accountants, Bishop Fleming.

The biggest majority (82%) of respondents agreed that the imposition of that National Living Wage will increase their payroll costs, with no sign of local authorities being able to match the increased cost with increased fees.

Almost as many (80%) reported that the new rules on auto enrolment pensions will be complex for care homes, which have a high level of part time and short term employees.

Tim Godfrey,(right) head of Bishop Fleming's care homes team, said: "It's easy to see that both these measures will add to the costs and administrative burden for care home owners.

"Nonetheless, the response to Government announcements about restricting immigrant labour helps to dispel the image of care homes being dependant on cheap immigrant labour."

The survey revealed that 45.5% said they were not reliant on migrant labour and had no problem in recruiting staff while almost as many (42%) said that increased immigration controls were of concern.

Said Mr Godfrey: "Homes that are reliant on serving local authorities are severely constrained on the fees they receive and, as a result, on what they can pay their staff.

"This could increase the miss-match between privately self-funded residents of care homes, and those who are funded by their local council. Until now, many care homes have relied on fees from self-funding residents to cross-subsidise the ‘below-cost' fees received for council funded residents.

"These extra costs could see a new divide between care homes that depend on council funding – forced to cut their costs and the quality of their care – and homes that decide to focus on self-funding residents.”

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