Trowers & Hamlins and Agenda Consulting carried out an independent survey between 19 February and 9 March 2018 looking at the payment of sleep-in covers and whether providers are paying the national minimum wage for time spent. 109 organisations responded which makes this the most comprehensive survey undertaken on this subject.
This survey supplements the survey we carried out last March on sleep-in shifts. In November last year HMRC set up the Social Care Compliance Scheme (the SCCS), and the comparative data shows that the landscape has changed dramatically. The survey reveals an increased awareness of the sleep in issue, but also highlights the potentially damaging costs and consequences for providers, many of whom simply do not have the budget to make up the National Minimum Wage (NMW) shortfall.
There is evidence that more providers are paying the NMW for sleep-ins, a trend which is likely to continue.
Who pays for sleep-ins?
The survey last March showed that commissioners had only agreed to fund 14% of service at NMW rates, and refused to pay or refused to even engage with the issue on 67% of services. The results of the latest survey show there has been a significant rise in the number of services the commissioners have agreed to fund at the NMW from 14% to 49%. However, this still means that the majority of sleep-ins services are not funded by commission.
37% of providers have asked commissioners to fund the historical NMW liability, and the majority of those have found that they do not even want to discuss it.
The back pay bill?
The impact of back pay is potentially very serious. It is difficult to estimate what the back pay liability is; the aggregate of those providers who responded place it at a total of £102.88 million and the respondents to the survey are employers of an estimated 7.4% of those working in social care.
Nearly 70% of providers feel that the issue means that viability to businesses is at risk, as only 6% of providers have budgeted for back pay liability.
What's the effect on care?
Surprisingly, the mean proportion of all services which will become unviable within the next year across those who gave data is 52%. This will affect 30% of people who rely on services from these providers. Nearly half (46%) of all providers believe they would have to make redundancies.
So far, providers have decided not to bid or negotiate for 273 new contracts because of their financial situation. Many are looking at mergers and reconfiguring care services. There are business opportunities for housing providers here.
The pressure on the social care system is nothing new, but is the lack of funding of sleep-in pay issue a tipping point? Whatever the outcome of the much-needed debate into the future of care services, it seems clear from the findings of the survey that a solution will have to be found sooner rather than later.
