Posted on 30/08/2016 by

Standards in elderly care could fall following the introduction of the National Living Wage for care workers unless the government is able to help plug the shortfall in funding, a think tank has warned.   

The Resolution Foundation said over half of young workers have received a £7.20 an hour rate pay rise, even though it only legally applies to over 24-year-olds. 

The study found no evidence of employers cutting back on shifts to finance the new wage rise and warned local authorities could use the excuse of higher wages to "ration" care services. 

The LGA has warned that the funding gap facing social care will rise to £2.9billion a year by 2020 

The Foundation warned that with extra cost of the National Living Wage in social care set to reach £2.3 billion by 2020, the ability of the sector to continue to spread the benefits in the way it has so far "will be limited". 

Senior researcher Laura Gardiner told the Telegraph: "If there's no extra funding in place in the long term local providers could easily blame higher wages for the further rationing of care services.

"These funding shortfalls existed before the introduction of the new wage, but what we don't want to see is it being allowed to put more stress on the current system."

The Resolution Foundation said over half of young workers have received a £7.20 an hour rate pay rise

Peter Kyle, the Labour MP for Brighton and Hove, said: "If we go through another round of attacking wages in care homes we will an increase crisis of care. 

"The government have got to work out how they can get more money in the sector while at the same time paying for the best staff."

The Local Government Association has warned that the funding gap facing social care will rise from £700million to £2.9billion a year by 2020. 

9A study by the think-tank ResPublica has warned the government could have to find accommodation for 37,000 elderly and disabled nursing home residents by the end of the decade.

The Foundation is now calling on the government to ensure that there are "sufficient funds" for providers to continue to implement the new wage "without adverse consequences for workers". 

Ms Gardiner added: "It is great news that the National Living Wage has had a large positive impact on pay in social care, giving hundreds of thousands of frontline care workers a pay rise, with no evidence of hours being cut to foot the bill.

"As the Living Wage continues to rise to its target value by 2020 we risk reaching a crunch point where a lack of funding leaves the care sector unable to continue to spread the benefits.

"Our ageing population combined with the prospects of reduced inward migration post-Brexit make it essential that more public funding is available for care providers to attract and retain the care workforce we need."

Source: The Telegraph