The effect of the proposed National Living Wage on care homes

20 August 2015 - Richard Bowden, Managing Director, Bupa UK

We welcome the introduction of a National Living Wage. Carers should be paid to reflect the amazing job they do in looking after society’s most frail and vulnerable older people.  

For too long, governments have ignored the effects of falling local authority fees. Local councils pay the fees for more than half the residents of care homes and these have fallen by 5% in real terms in recent years.  

Pay makes up around 60% of care homes’ costs and this percentage is higher when caring for residents who have more acute care needs. Many care providers are struggling to increase wages, further train their people, and raise standards, while local authority fees continue a race to the bottom.  

We and others – ­ including independent analysts LaingBuisson – have been saying for some years that the fee levels being paid by most local councils are insufficient and well below the true cost of providing care for vulnerable older people.  

It is only right that funding is increased to cover people's true care needs, including local authority fees that support a wage for carers that truly recognises the challenging work they do.  

We are pleased the Government has promised to look at social care funding in the next spending review. The sector – from older people and their families, to carers – needs these promises to be turned into real action to increase funding.  

It is crucial that central government and local authorities agree a solution that ensures appropriate funding is made available for publicly-funded care to pay fees that reflect this positive move.

About Bupa

Bupa's purpose is helping people live longer, healthier, happier lives.

With no shareholders, our customers are our absolute focus. We reinvest profits into providing more and better healthcare for the benefit of current and future customers.

We have 15.5 million health insurance customers, provide healthcare to around 14.5 million people in our clinics and hospitals, and look after over 23,300 aged care residents.

We employ over 78,000 people, principally in the UK, Australia, Spain, Poland, Chile, New Zealand, Hong Kong, the USA, Brazil, the Middle East and Ireland, and many more through our associate businesses in Saudi Arabia and India.

Health insurance is around 70% of our business. In a number of countries, we also run clinics, dental centres, hospitals and care homes and villages.

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