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National living wage 'will put care sector at risk of catastrophic collapse'

Published 20/08/2015

Care home bosses warned the national living wage will cost the sector £1 billion by 2020
Care home bosses warned the national living wage will cost the sector £1 billion by 2020

The introduction of a national living wage will leave the care sector "at serious risk of catastrophic collapse", the head of the body representing the industry has warned.

Five of the biggest care home providers in the UK have written to Chancellor George Osborne to warn that the plan will cost the sector £1 billion by 2020, the BBC reported.

From April next year a minimum rate of £7.20 per hour will apply for workers aged over 25, rising to £9 in five year's time.

Four Seasons Health Care, Bupa, HC-One, Care UK and Barchester said they supported a national living wage but claimed that as staffing accounts for 60% of care there would need to be efforts to rescue the care system.

Their letter follows one last month from the UK Homecare Association which said if the Government did not act to address the funding gap "continued supply of state-funded homecare will become unviable".

Martin Green, chief executive of Care England, told the BBC: "Without adequate funding to pay for the National Living Wage, the care sector is at serious risk of catastrophic collapse."

He said: "We want to work with the Government to find a fair solution that will ensure the care sector can provide a safe and comfortable environment for older people who live in care homes."

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