Annie Gunner Logan explains how the cost of the Scottish Government's policy to pay all staff the living wage has been passed onto social care bodies
It’s Living Wage week. On Monday morning, the Living Wage Foundation announced that the real Living Wage rate in Scotland will now be £9 per hour. That’s an increase of 2.8% on the previous rate.
Anyone working in adult social care in Scotland is likely to be looking at that increase and – quite rightly – thinking "wow".
For just two short years ago, social care was subject only to minimum wage protections. Many care and support workers – especially in the private sector – were being paid just £7.20 an hour (and those under 25, probably less).
Most voluntary sector employers were able to do better than that, but their rates of pay remained under constant pressure from price-driven competitive tendering. Paying a decent wage often meant losing out on a service contract, or having it transferred to a lower-paying organisation.
That all changed on 1 October 2016, when the Scottish Government’s commitment to the Living Wage in adult social care first took effect. Those who had been paid £7.20 an hour found that their pay increased, overnight, to £8.25. Over the two subsequent financial years, that rose to £8.75. and now, to £9.
I defy anyone to say this isn’t one of the most remarkable success stories in social care. A hike in pay of 25% in just over two years for a workforce that has constantly been told how much it is valued, but couldn’t see that value translated into reward, is without question an extraordinary achievement.
But what is questionable, according to new research published this week by CCPS, is how that achievement has been delivered, and to whom, exactly, its success can be attributed.
The research, conducted by the University of Strathclyde, evaluated the experience of the Living Wage initiative for social care from the perspective of those charged with implementing it. I’d encourage you to read the full report, but for convenience’s sake I can tell you, in brief, that the whole thing has been an absolute nightmare.
Clearly, employers are absolutely pivotal to this whole policy, given that they are the only ones that can actually deliver it on the ground. Yet employers in our sector haven’t been properly engaged or consulted; they’ve mostly just been ‘telt’.
Nobody is quite sure how the sums allocated to support the living wage, at either strategic or operational level, are calculated, with the result that there is very little confidence among employers that the policy is deliverable. Most providers have no idea how new contract prices are being set, and most councils seem reluctant to explain it to them.
If people are aware of the implementation guidance (and some are not) then they either don’t think it’s clear enough, or they’re ignoring it (possibly both). There is widespread confusion and disagreement about a number of critical matters, including whether the funding is supposed to cover employer costs, such as National Insurance and pension contributions; whether any provision should be made to maintain pay differentials within staffing structures; or whether providers should have to make efficiencies in order to deliver the policy.
And every one of Scotland’s 32 local authorities has gone its own sweet way on the entire exercise, leaving multi-authority providers to make sense of the chaos pretty much on their own.
So far, so challenging. To add further weight to the evidence set out in the Strathclyde University research, we’ve published a report of a provider survey we conducted ourselves, designed to establish how our sector is getting on with implementation in 2018/19.
Again, there’s a good news story here: nearly 90% of providers have successfully implemented the living wage pay rise for this year. But more worryingly, less than a third of them have received enough additional money from councils to cover the cost.
In the First Minister’s speech to her party conference last month, she stated: "We may not yet have the constitutional power to make fair work a legal requirement – but we do have the financial power of government to make it a practical reality.”
The findings outlined in both our reports suggest that the delivery of the living wage in social care has, in truth, been made a practical reality at least in part by a significant transfer of financial responsibility and risk to the voluntary sector, with concomitant pressure on the sector to bail out the policy with a pretty whopping level of subsidy.
The University of Strathclyde report concludes with a number of recommendations for smoothing the implementation process and making it much more workable for providers in our sector. We will, of course, be pursuing adoption of these.
But if you’re reading this from outside the wonderful world of social care, you might be thinking, what’s any of this got to do with me? Well now: let me share with you a little bit more of the First Minister’s speech: “We’ve already made payment of the real Living Wage part of our procurement process. We’ve extended it to adult social care workers…By the end of this parliament, we will extend fair work criteria to as many funding streams and business support grants as we can.”
In other words, you’re next. And if the implementation model adopted for social care is used for you too, then I wish you luck, because you’ll need it.
Living Wage through procurement? Absolutely. Bring it on. The quicker the better. But in the words of the Harry Enfield character: you really don’t wanna do it like that.
