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 wage."

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 employers.

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 that."

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 legal requirements."

1 Les Hems and Andrew van Doorn, NCVO Survey of Job Roles and Salaries in the Voluntary Sector 1997/1998, NCVO Publications, 1998