The managing director of Prestige Nursing + Care has warned that an increasing number of home care providers will go out of business as they struggle to pay their workers a fair wage and recruit new talent on a competitive salary.
Speaking to Home Care Insight, managing director Jonathan Bruce said it is becoming “harder and harder” for providers like Prestige to attract people to the care industry given the current funding challenges facing the industry.
His remarks came after the government announced a recruitment campaign to fill the 110,000 vacancies in the adult social care sector.
“Home care isn’t the most glamorous of jobs, so you have to pay a good wage, but we’re not allowed to, or if we do it’s very hard to make ends meet. Allied Healthcare went out of business last year because of that very reason and there will be more failures in this marketplace as it goes forward because of the way it’s set up,” he warned.
Bruce stressed that home care providers can’t afford to compete with major recruiters like Amazon and Sainsbury’s, who are upping their wages.
“We have a US based business called Comfort Keepers and one of their biggest competitors is Amazon, which has put up their pay rate to a minimum of $15 an hour. They can’t afford to match that in their sector. Over here, Sainsbury’s is paying around £10 an hour,” he said.
“In our sector, you’ve got one or two key buyers and a multitude of suppliers, so the buyers tend to lower the natural average pay that it should be. So the pay rate is artificially low and held down by the local authorities who can’t afford to spend more.”
Prestige Nursing + Care is striving to become a real living wage employer, which will mean the company pays its workers £9 an hour, above the national minimum wage, which will rise to £8.21 on April 1.
But Bruce admitted that his company will struggle to make a good margin and reinvest in the business, given that 70% of its expenses are made up of pay.
“I do sympathise massively with local authorities, but something has got to give,” he said.
As the government prepares to publish the delayed Social Care Green Paper, Bruce has called for a clear funding settlement.
“Let’s say it’s going to be percentage on national insurance or a penny on the pound, but whatever it is, let’s have a clear direction,” he said.
“More than anything else, it comes down to how social care is going to be funded. Once that box is ticked, we can work on other things like training and retention. Unless the funded is right, how do you make a difference?”