Home care providers have warned that they are paid too little by councils to allow them to pay the minimum wage.
The warning comes as the United Kingdom Homecare Association (UKHCA) increased the industry’s recommended minimum hourly rate for homecare services.
The UKHCA’s latest Minimum Price for Homecare paper said the recommended minimum should rise by 55p an hour so that providers can meet recent increase in the national minimum wage, which took effect on 1 October.
The paper said that councils should pay a minimum of £15.74 an hour, up from the £15.19 recommended in February. But figures from the Health and Social Care Information Centre show that local authorities paid an average of £15.50 an hour to home care providers in 2013-14.
The UKHCA warned that the new minimum highlights a “significant discrepancy” in the rates paid to home care providers, many of which are struggling to keep ahead of the minimum wage.
Colin Angel, policy and campaigns director at the UKHCA, said: “The price of an hour of home care is a vital question for local and central government, statutory regulators, trades unions and the public.
“The prices councils pay for care must cover the costs of the workforce, including – as a minimum – full compliance with the prevailing national minimum wage, including the time spent travelling between service users’ homes.”
The UKHCA’s minimum rate calculation includes mileage, employers’ national insurance contributions, holiday pay, a profit of 3% and business overheads. The UKHCA paper said that overheads account to 27% of the recommended minimum price.
David Pearson, president of the Association of Directors of Adult Social Services (Adass), said: “I welcome the UKHCA’s costing model for home care as a basis for discussion in local areas. Local authority commissioners expect providers to comply with the law and to pay at least the minimum wage covering the time spent directly providing care and travel time. Equally, it is right that local authorities understand the actual costs of providing care in their area and take this into account in setting fee levels and agreeing contracts.”