One in five care staff working for social care organisations, including charities, could be made redundant if the sector has to pay an estimated £400m in back pay to sleep-in care workers, according to new research released today.
A survey carried out by Agenda Consulting and Towers and Hamlins LLP on behalf of the Voluntary Organisations Disability Group, which represents care sector providers including charities, found that 46 per cent of care organisations were considering redundancies to cover the costs of back pay to staff.
It is likely that front-line staff would be worst hit by redundancies, the survey found, with 19.7 per cent of staff potentially at risk of losing their jobs.
The government changed its guidance on sleep-in care workers last year after two tribunal rulings left care charities facing a back-pay bill for six years’ of arrears, which Mencap estimated would total £400m.
Charities that used sleep-in carers had previously typically paid a flat rate of between £35 and £45, plus an hourly rate for any time spent providing care rather than being asleep. But the revised guidance said the carers should be entitled to the minimum wage for the entirety of their shifts.
The government last year asked charities that owed arrears to sign up to a scheme that gave them 15 months to pay off any arrears.
Today’s publication says that the viability of 70 per cent of care service providers is threatened by the sleep-in pay crisis, with 30 per cent of beneficiaries likely to have their services affected.
The requirement to pay back-pay to affected staff also means that 70 per cent of care organisations are trying to renegotiate contracts with commissioners and 56 per cent are considering handing services back, according to the survey.
If back-pay for six years has to be repaid, 68 per cent of the care organisations surveyed said there would be a threat to their viability, with only 6 per cent having budgeted for their back-pay liability.
Properties would have to be sold to cover the costs in 22 per cent of cases, the survey found.
Only half of care service commissioners are already paying the national minimum wage for care workers on sleep-in shifts, the survey found, and any back-pay bill would make the majority of services unviable.
Mencap said last year it would owe £20m in back pay. The charity has also said it might have to close 200 residential care homes and other services and make 4,000 staff redundant if forced to pay.
The Court of Appeal is considering an appeal by Care England against the government’s back-pay decision.
Rhidian Hughes, chief executive of the Voluntary Organisations Disability Group, said: "The social care sector is facing an existential threat caused by sleep-in pay, which is entirely due to unclear and changing government guidance. Being hit with an unexpected liability for back pay is unfair to the people who rely on care, but also to care workers, local authorities and providers of these crucial community services."
He said that a solution was needed by September to prevent a dramatic increase in the impact of the back-pay crisis on adult social care providers.
"The solution is simple: government must fund all care work, including sleep-in shifts, at the National Minimum Wage and pay the back pay owed to care workers for the past six years," Hughes said.