Overnight carer back pay scheme ‘unaffordable’

Care providers have dismissed a government scheme to tackle a problem over back pay for overnight shift staff, as a ‘suicide note’.

The charity Mencap said the government was sacrificing the well-being of the most vulnerable people in society and putting the jobs of low-paid staff at risk.

Ministers said the scheme was designed to help ensure workers were paid what they were owed. But charities say the bill for six years of extra pay is unaffordable.

The Department for Business (BEIS) said it was introducing a new compliance scheme for social-care providers that might in the past have incorrectly paid workers who stayed overnight for sleep-in shifts below the legal minimum wage.

The row developed when Revenue & Customs (HMRC) said it would pursue employers for six years’ worth of back pay, totalling £400 million.

It said workers were owed the minimum wage for every hour of an overnight stay at residential care homes.

Mencap, which runs residential housing units for people with serious learning disabilities, says the bill for six years of back pay is unaffordable.

They have previously said they might have to pull out of some services in the bill is enforced.

The government has now announced that employers will be able to opt into a new social-care compliance scheme giving them a year to determine what they owe to workers, backed by advice from HMRC.

Enforcement action for the back pay will be launched against those who do not sign up.

A government official said: “The scheme has been designed to help ensure workers are paid what they are owed, while also maintaining important services for people who access social care."

Derek Lewis, chairman of Mencap, said the deal ‘completely fails to give any reassurance to people with a learning disability that their homes and care are secure and to carers that their jobs are not under threat’.

The Voluntary Organisations Disability Group said ‘the sleep-in crisis remains critical and unresolved’ and that the government's plans ‘fall well short of what is necessary to remove the continuing, damaging uncertainty’.

The Local Government Association (LGA) has responded to the announcement. Izzi Seccombe, chairman of the Local Government Association’s community well-being board, said: “The fact that employers won’t have to settle any back-payment for sleep-in costs until March 2019 is helpful and buys some much-needed time to further understand the size and potential impact of the historic liability. But this announcement does not end the uncertainty for providers, care workers, the people they care for and their families, and those who pay for their own care or employ a personal assistant through a personal budget.

“It was misleading Government guidance in the past which caused the confusion over whether National Minimum/Living Wage should apply for sleep-in shifts. Now the Government has clarified the position, it needs to provide genuinely new funding to deal with back-payment.

“Councils already face a £2.3 billion annual social care funding gap by 2020 and pressures across the sector – particularly on providers – are acute. If the Government does not fund the historic liability then we are likely to see more care providers going bust, more contracts being handed back to councils, and care workers being made unemployed.

“The focus of this announcement is very much on historic liabilities. The Government cannot ignore the additional costs of sleep-ins in the here and now, and into the future. It is wrong to assume the Spring Budget £2 billion for social care can cover this additional burden. The forthcoming Budget needs to inject new money into social care to meet this pressure.”