Fear over cost of living wage
Jewish Care will have to find £2m more annually. But there are other issues
GEORGE OSBORNE’S headlinegrabbing Budget commitment to a substantially increased national living wage caught charity bosses on the hop. Four months on, Jewish Care chief executive, Simon Morris, can put a price on it in his charity’s terms — and it is a high one.
The living wage replaces the current minimum wage of £6.50 an hour for over-25s. It will rise to £7.20 from next April and to at least £9 from 2020. The impact will be significant for welfare charities, particularly those providing residential care for the elderly, which are already feeling the pinch following reduced local authority contributions.
Having last year awarded a nine per cent salary rise to the lowest paid 17 per cent of its workforce, Mr Morris estimates that meeting the £7.20 minimum from April 2016 will be a manageable £150,000. It will be a different story in 2020, given that half its 1,400 employees currently earn below £9 an hour. His estimate is that the charity will have to find at least £2 million annually to meet the extra staffing costs.
Those on the lowest wage scale include domestic, cleaning, kitchen and laundry staff. “But by 2020 it’s impacting on care staff — and we are talking front-line care staff,” he points out. “A care worker in a home, a home care worker, a member of staff in one of our dementia day centres, a member of staff in the Sobell day centre [Golders Green] — the bulk of our staff who do the care.”
Mr Morris — who “fully supports” the principle of raising salary levels for the lowest paid — says the £2 million estimate does not take account of the fact that Jewish Care has traditionally paid above the minimum wage in order to attract the best staff.
He also highlights an unintended consequence of the Chancellor’s move; the effect on pay differentials. “Everyone knows that at work, differentials are important. Therefore, if we’ve moved all our carers on to £9 an hour, then the gap between being a carer and being a team leader is very small. And the team leaders have great responsibility.
“So we are trying to work through the knock-on effect. But it’s difficult to come up with a number because the government’s figure could end up being over £9.”
With residents accepted solely on the basis of need, rather than ability to pay, two-thirds of those in its care homes are funded through local authorities. Care requirements have to take account of the fact that people now enter a home in their 90s with a greater level of frailty. The average weekly shortfall between the cost of care and the local authority allocation is £371 per resident, leaving a budgetary hole currently exceeding £3 million annually, even after contributions from families.
Though appreciating the plight of cash-strapped councils, “we have to