JULY and August saw dire warnings from the big home care and care home companies, that the introduction of the so-called national living wage will leave the care sector “at serious risk of catastrophic collapse,” which came as no surprise to GMB.  

We have been warning of the crisis in care since before the collapse of Southern Cross in 2011.  

While Southern Cross’s demise had much to do with the debt-ridden private equity model which separated the running of the homes from the ownership of the properties, the care crisis today is not the result of a welcome increase to the minimum wage.  

Without additional cash from government, the increase to the minimum wage may happen — by coincidence — to tip it over the edge, but it is years of underfunding by successive governments which has brought the care sector to the brink.  

This chronic underfunding and the flawed interface between the NHS and care, is causing the failure.

It was Germany’s first chancellor, the conservative Otto von Bismarck, who introduced the modern welfare state in the late 19th century.  

Our modern welfare state began to emerge from 1906 and it took the Beveridge report in 1942 to pave the way for the “cradle to grave” social insurance, free at the point of use, funded by all people of working age paying a weekly national insurance which would tackle “the five giants” — Want, Disease, Ignorance, Squalor and Idleness.  

A universal state scheme was cheaper than a myriad of individual friendly societies and private insurance schemes and less expensive to administer than a means-tested government-run welfare system for the poor.

Through government provision, all citizens would receive adequate income, healthcare, education, housing and employment.  

The Liberal Party, the Conservative Party and then the Labour Party all adopted the Beveridge report’s recommendations and following the Labour election victory in the 1945 many of Beveridge’s reforms were implemented.

Remembering history is important when that cradle to grave cross-party vision of the welfare state has been replaced in 2015 by “cradle to care home door.”  

Underfunding has holed the safety net, through which today fall those of us and our loved ones unlucky enough to lose the lottery of needing to go into a care home or requiring care support at home.

The care sector employs one million workers to care for 1.2 million vulnerable and elderly people — 400,000 in care homes and 800,000 in their own homes.  

Yet half a million have lost entitlement to state help with washing, dressing and meals since 2009 and thousands are denied a care home place on the basis of costs rather than need.

George Osborne’s national “living wage,” announced in the “emergency” summer Budget, was greeted as a political masterstroke by jubilant Tory MPs, but it took no account of reality on the ground.

The Chancellor failed to consult providers, care purchasers — councils and the NHS — or GMB and the other unions which represent care workers.

At the same time, Osborne ordered massive cuts in public spending likely to hit local authority and health service funding for home and residential care for more than a million old and vulnerable people.  

This inconsistent policy has thrown the industry into turmoil.

All eyes are now on the Treasury’s spending review, due to be announced at Westminster on November 25.
People are living longer and their needs are getting greater, but the budget to look after them is being squeezed.

With profit margins under threat, care home owners will react either by cutting staff numbers, closing homes with low occupational levels and shifting residents to other units or both. (Moving residents frequently results in early death among elderly and confused people, who often have dementia.)

In the domestic care sector, employers calculate that to meet existing underfunding and implement the living wage, spending must rise by £753 million in the first year alone.

They demand urgent action to address the deficit, or state-funded home care will become unviable.

Providers will exit the industry, causing distress for clients and creating uncertain employment prospects for trained and committed care workers.

The answer, both GMB and the employers say, is to close the funding gap with a bold new programme of investment in care for those who cannot adequately care for themselves.
GMB says this additional investment, which must include new money for training, needs to be ringfenced to care so it gets to those who need it.

In their election manifesto, the Tories made many promises to the elderly and vulnerable, most of which have been scrapped to meet spending cuts.

Osborne has an opportunity to solve a growing crisis by ensuring that councils have enough resources to meet the social care wages bill.

Older people are being short-changed by the current approach to funding. The care workforce is getting a raw deal too. The sector desperately needs more public investment and control. Those who need care will never forgive Osborne if he fails to take this opportunity.

Justin Bowden is GMB national officer for care workers.