The national minimum wage could cost the voluntary sector up to
£51 million with smaller organisations likely to feel the
pinch worst, writes Marcia White.
Last week's publication of the first-ever survey1 of job roles
and salaries in the voluntary sector by the National Council for
Voluntary Organisations could prove gloomy reading for some smaller
organisations. For the forecast is that the national minimum wage,
due to be introduced next April, could cost the sector an
additional £51 million.
However, the NCVO believes this does not necessarily signal the
wholesale demise of smaller care providers. "The report has looked
across the sector as a whole in order to get a clear picture of
what the impact would be on the voluntary sector," said the NCVO's
director of public affairs, Adam Gaines. "From that we have been
able to work out the potential cost impact of the minimum
Most voluntary groups are paying above the proposed levels, says
Gaines, but the sector as a whole will need to readjust its
approach. "Voluntary organisations will need to ensure that their
funders, particularly in the field of social care, have contracts
which take into account the implications of the national minimum
wage to ensure that staff are paid in line with it."
A minimum wage will certainly boost wage packets in the sector.
Almost half the part-time paid staff in smaller organisations and a
quarter of those in the biggest voluntary organisations will
benefit from a basic rate set at £3.60 an hour. Part-time
employees - of whom there are 195,000 in the voluntary sector - are
expected to benefit to the tune of £12 million in total.
Researchers found that a more generous rate of £4.50 would
have affected 59 per cent of the sector's social care
Sanjiv Sachdev, research fellow at Cambridge University, who has
been studying wages in the social care sector for the last six
years, says the introduction of the minimum wage does not have to
be all doom and gloom. He believes many smaller voluntary groups
could ride out the first turbulent years by making use of another
government vehicle - training grants, due to be introduced at the
same time as the minimum wage. "Employers should be able to offset
costs from the national minimum wage in the short term from the
training grants," he says.
Best Value will also help smooth the way, with its emphasis on
good practice rather than the lowest priced tender. But Sachdev
says there is concern that the national minimum wage will fail to
increase over time: in America the basic rate stayed static from
its introduction in 1981 until 1990.
Unison's national officer for the voluntary sector, Owen Davies,
says most employers have supported the principle of a minimum wage.
"From the very beginning, the overwhelming majority of voluntary
organisations have made it clear that they don't want to be
excluded from minimum wage requirements and we are very happy with
However, Davies says there are concerns that some employers may
try to dodge the regulations to save cash by employing tactics such
as cutting the number of paid hours, while expecting staff to
produce the same volume of work. "The worst evidence of this is
among part-timers and small organisations," he says.
But, he argues: "These organisations have got a responsibility
to their staff, just as they have a responsibility to the client
groups they service. The approach of voluntary organisations which
are reasonable will be to sit down with their staff to deal with
the temporary problems. Some have increased their wage rates in
anticipation of the national minimum wage," he adds.
Job losses are also a worry, but Davies believes that "good
voluntary organisations, which take their responsibilities as
employers seriously, will be able to find ways of meeting their
1 Les Hems and Andrew van Doorn, NCVO Survey of Job Roles and
Salaries in the Voluntary Sector 1997/1998, NCVO Publications,