Page 49 - Unfair To Care 2024 - Who Cares Wins

SIN 6. A DYSFUNCTIONAL CARE MARKET
100%
OF CEOS EXPRESSED A BELIEF THAT THERE WILL BE AN ACCELERATION OF UNSUSTAINABLE CONTRACTS BEING HANDED BACK TO LOCAL AUTHORITIES.
CQC Market Oversight Scheme, led by Cordis Bright.
Unfair low pay contributes to the problems of a dysfunctional care market and regional economic inequalities. Increasing the National Living Wage – even at levels above average wage rises – does not resolve the challenge of competition for staff from other industry sectors such as retail services.
A dysfunctional care system: In the NHS, most care is free at the point of use, state-funded, and usually delivered by organisations in the public sector. Adult social care, by contrast, is a far more complicated mix of state-funded and privately-financed care, provided by 17,900 organisations49 at prices determined by local market forces and the funding available to local authorities.
Sustainable council-funded care market: A 2017
study into the care homes market by the Competition
and Markets Authority50 said that the parts of the industry that supply primarily local authority- funded residents are unlikely to be sustainable
at the current rates councils pay. It identified the immediate threat to financial sustainability as being in care homes primarily serving council-funded residents that rely on state funding because the level of funding has not been sufficient to cover total costs in these homes.
Low fee levels for providers of care to local- authority funded residents descends into a spiral of regional economic and service decline.
In an October 2022 survey for the CQC Market Oversight Scheme, led by Cordis Bright51, 100% of CEOs expressed a belief that there will be an acceleration of unsustainable contracts being handed back to local authorities.
Increasing the National Living Wage does not solve the vacancy problem: Rises in the National Living Wage can conceivably mean that jobs in other lower-paying sectors will grow closer in pay to social care jobs than they were before (if employers can’t increase wages at the same
rate), generating additional competition for workers.
Korn Ferry’s research highlights that working in social care is significantly more demanding than many other positions paying the National Living Wage. So it is inevitable that many will choose far less demanding and accountable work, if offered the same pay.
In short, raising the National Living Wage does not improve the competitiveness of the care sector when seeking to fill local vacancies or retain existing staff. In fact, it’s possible it increases its vulnerability.
SECTION 6: THE SEVEN DEADLY SINS
49. ‘Key facts and figures about adult social care’, The King’s Fund, May 2023
50. ‘Care homes market study’, Competition and Markets Authority, November 2017
51. ‘Learning disability and autism social care providers financial impact assessment’, Cordis Bright, October 2022
49