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Living Wage risks catastrophic collapse of care

20 August 2015

The National Living Wage could result in a "catastrophic collapse" in the number of care homes, according to the five biggest providers.

Under plans announced in the Budget, workers aged over 25 in the UK will be paid a minimum of £7.20 an hour from April next year, rising to £9 by 2020.

In a letter to Chancellor George Osbourne, Four Seasons Health Care, BUPA, HC-One, Care UK and Barchester say staffing accounts for 60% of the cost of care.

While the companies say they that they support the National Living Wage the measure will cost the care sector £1billion by 2020 meaning efforts will be needed to rescue the care system.

They warn any shortage of care places could put huge pressure on the NHS.

The government has said social care would be considered as part of the spending review later this year.

Martin Green, the chief executive of Care England which represents the care home industry, said:

"Without adequate funding to pay for the National Living Wage, the care sector is at serious risk of catastrophic collapse." and that there was a "grave and very real possibility" that a provider could fail within the next two years.

The UK Homecare Association made a similar warning last month, saying services to care for people in their own homes would become "unviable".

For more information see National Living Wage will 'damage care homes' @ www.bbc.co.uk and Cost of implementing ‘living wage’ could leave home care market unviable, providers warn @ www.communitycare.co.uk