The below Parliamentary question was asked by Ian Austin on 2016-10-18.
To ask the Secretary of State for Health, what estimate he has made of the potential effect of the introduction of the national living wage on the cost of care paid for by local authorities.
David Mowat
Social care continues to be a key priority for the Government. This is why, against the context of tough public sector finances; the Government has taken steps to protect social care services. The Government is giving local authorities access to up to £3.5 billion of new support for social care by 2019/20. This should mean local government has access to the funding to increase social care spending in real terms by the end of the Parliament. This will support councils to continue to focus on core services and to pay fees which reflect provider costs including the National Living Wage.
The spending took into account a range of financial and economic factors, including projections and data on the National Living Wage from the Office of Budget Responsibility and Skills for Care.
The National Living Wage is an important step in rewarding the valuable contribution made by care workers, who often fall into the lowest earning occupations. Out of an estimated 1.16 million workers in adult social care in England, up to 900,000 people are expected to benefit.
Under the Care Act 2014, local authorities must have regard to fostering an effective workforce with the appropriate capabilities when shaping their local markets. The Act and its statutory guidance make clear that prices and fee rates agreed with providers must reflect these new duties, including the National Living Wage. The Department continues to monitor the whole of the market of care providers and engage with the sector to better understand the challenges they face and support local authorities who purchase services.
