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Care homes warn Chancellor of ‘catastrophic collapse’ over living wage

Salary costs to rise by 10 pc following Autumn statement

Care providers are warned to expect salary costs to rise by 10 per cent from April, following the Autumn Statement.

This sets out a pledge to increase the minimum wage as follows:  

  • National Living Wage for individuals aged 23 and over: + 9.7 per cent to £10.42/hour
  • National Minimum Wage for 21–22-year-olds: +10.9 per cent to £10.18/hour
  • NMW for 18–20-year-olds: + 9.7 per cent to £7.49/hour
  • NMW for 16–17-year-olds: +9.7 per cent to £5.28/hour
  • Apprentice rate: +9.7 per cent to £5.28 an hour

The statement also adds £4.7 billion in 2024-25 to the adult social care system in England. This includes £1 billion to directly support discharges from hospital into the community, to support the NHS.

There was also an announcement to delay the national rollout of social care charging reforms from October 2023 to October 2025. Funding for implementation will be maintained within local government to enable local authorities to address current adult social care pressures. This will be allocated at the Local Government Finance Settlement through the Social Care Grant.

Following a survey, the Local Government Association has warned that all councils face additional cost pressures which were not included in their budget for this year.

It comes as councils are battling to find an extra £2.4 billion this year to meet unforeseen extra inflationary cost pressures, energy prices rises and uplifts in contract prices or re-negotiations (affecting 90 per cent of respondents).

Most councils said they would use reserves and make cutbacks to services to plug funding gaps, including to adult social care.   

Think-tank pundits have described the cash injection for social care as “recognition of the severity of the situation… but unlikely to be sufficient in the face of growing needs”.

Commenting, Rhidian Hughes, chief executive of disability charity VODG, said three key changes are needed to put social care on a stable footing:

  • link social care pay to NHS pay bands
  • resource the forthcoming Local Government Finance Settlement to deliver adult social care for all
  • A robust, holistic and fully resourced plan to meet the increasing demand for essential care.

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