By Debbie le Quesne

Osborne’s chaos: A local view

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Spent too much time yesterday thinking about my Osborne blogs and what really needed to be posted is the local angle.

A two per cent council tax increase . . . what planet does he think we are on? It would pinch everyone a little – yes, but will it make any difference at all? No. Emphatically, no.

I understand that Dudley is considering raising the level of council tax, while Sandwell will probably not. Whatever the decision in these two key West Midland boroughs, the great financial divide between the real and notional costs of care will not be plugged.

We have turned into the New Year and the Government still appears rudderless when it comes to the care sector. Local authorities, Mr Cameron, do not have sufficient monies to pay proper rates for the services the private sector provide. What is so hard to understand? Tinkering with council tax is like dressing a critical wound lightly when invasive surgery is prescribed.

So many of my members are relatively small players and their market resilience is just about gone. These people are not the fat-cat operators many perceive. The bigger operators are also struggling as the fees don’t cover their costs either. Caught in a financial and moral dilemma, they are struggling to survive on economics that don’t stack up, while still trying to care for an ever-growing pool of needy people.

Self-help is a common and much over used term. Well, let me say the industry has been self-helping now for a good decade. Ironically, many local authorities once perceived as the enemies of delivering a fare rate to care providers, now genuinely see the need to pay it. But they can’t, Mr Cameron – because central Government administer the real money and it’s not being decanted downwards.

How are these essential social care businesses to survive? They have used their reserves a long time ago, most have no properties to sell off, and oh yes, a new raft of outgoings – the living wage – faces them in April.

An impact survey by the association suggests any benefits found with reductions in Corporation tax – a fall to 19 per cent in 2017 and 18 per cent in 2002 – will not plug an ever-widening chasm between realistic operational costs and fees paid for care by local authorities.

Under the Chancellor’s plans, workers aged over 25 will get a minimum of £7.20 an hour from April, rising to £9 by 2020.

The Government says this will mean a direct pay rise for 2.5 million workers of an average of £5,000 by 2020.

It’s a great concept and I applaud the sentiments of this initiative. But there needs to be some Goverment financial lubrication in the care market to make it happen without the inevitability of home closures.

The cost to my members? Let me remind you: It will add £23 per week to the care of every Midlands person in a residential care setting.

It will also mean there will be little or no pay differential between domestic staff will little responsibility and experienced Diploma Level 2 carers.

For those businesses offering community care, my association concludes there will be an additional £1.50 per hour cost for each member of staff. This figure does not include the additional expenses of travel time, which is not funded in the local authority rate.

There simply isn’t anywhere amongst us for extra savings to be made. Years of austerity have taken their toll and the creative thinking is through.

Our calculations regarding the timing of and potential savings on Corporation tax just don’t work as an offset to this extra expenditure, over which members have no control.

WMCA is pressing Government for a speedy response. Along with other national representative bodies we are doing all we can. I really do believe its now the time for Mr Cameron to intervene and, likewise, do all he can.


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