Care Home Management

The Care Home Decision Makers’ Magazine

UK Care Home News

Pay lottery expected to continue as ‘cost of care’ discussions rumble on

Difficulty agreeing a fair cost of care, which is sustainable for local markets and offers ‘a reasonable profit’, is likely to mean continued complexity and geographical variation in pay across the country.

In its 2022 annual report, the Low Pay Commission warns that local government and providers continue to express doubts over the adequacy of the proposed funding settlement, which was delayed until 2025 in the Chancellor’s Autumn statement. Despite extra funding available to local authorities, the initiative increases their responsibility for commissioning care home services.  

In a special section on the care sector, the Low Pay highlights the substantial challenges of a tight labour market. Low-paid workers in sectors including care homes face increasing stress, and with rising fuel costs, greater hardship. The LPC concludes: “The rising minimum wage was one factor in a general funding crisis, and the effects of planned reforms on these difficulties remain uncertain.”

Union evidence shows the growth of insecure work including zero-hours contracts, agency, casual, seasonal and other fixed-term contracts.

In 2023, the National Living Wage will increase by 9.7 per cent (92p) in April 2023 to £10.42. The current recommendation is to increase the NLW by 6.3 per cent in 2024 to £11.08. However, slowing GDP growth and a softening in labour market may reduce this recommendation target may be more appropriate in 2024.

Care England told us that while care workers are generally paid above the National Minimum Wage in the UK there ‘is a clear north-south divide’. While employment has only fallen by three per cent in social care, less than the average for low-paying occupations, vacancy rates are particularly high in the sector. Skills for Care reported that in August 2022 there were eleven vacancies per filled job in adult social care in England (Skills for Care, 2022). This reflects an increased demand for adult social care in recent years due to an aging population and increased staffing requirements due to increased staff absences.


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