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By Debbie le Quesne

The haves and have-nots: Bizarre economics of care

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The UK care home sector is losing managers and failing to replace them, that was what LaingBuisson was telling the media more than 12 months ago. And guess what, it’s not changed today.

The shrinking pool of talent for the top jobs with providers of elderly care is driving manager salaries to new heights.

In the latest data I have to hand it says new-build homes are offering in excess of £60,000 a year for managers.

That means with the additional costs of National Insurance employer contributions, pension payments and other sweeteners, the source cost for providers is rapidly approaching £100,000, and a bonus scheme can easily tip this even higher.

Of course, we wouldn’t expect to see these figures being paid amongst many of our members and it’s not because they are mean employers. It’s a simple case of economics: There’s just not enough money in the pot as the region is too poor.

It’s a fact that many of the lager corporates operate in much more affluent areas than the West Midlands and unlike many here, their main trench of income is from private payers. Most of my members survive on council-funded placements and it’s their primary source of income.

Austerity measures is seeing the industry becoming increasingly polarised – the haves and have-nots.

In May last year, according to LaingBuisson Recruitment co-founder James Rumfitt, the residential care sector as a whole was struggling to find managers of competence.

I am not surprised.

According to the healthcare consultant’s Care Home Pay Survey – second edition, the average care home manager salaries at the beginning of 2015 were up 4.2 per cent above the previous year.

This was incredible 49 per cent higher than salaries seen a decade ago. Compared to an increase of just 24 per cent in median full-time employee earnings in the UK economy as a whole, it’s an eye-watering hike.

Isn’t it odd, the general care market is in turmoil, yet the economic dynamics of a shortage of good managers, pushes up their salaries at the top end of care provision. Supply and demand are hard masters.

While there will always be those who can afford private care payments and thus fund very generous salaries for the elite operators, there will be many more people receiving care on local authority rates only. Their care providers, where pay rates remain anchored to the Living Wage, will not have the privilege of top-ups to fund such salary extravagance..

But I must say this: The care I have seen in some of our struggling homes has been exemplary. Plush surroundings, teas on the terrace, matching furnishings and expensive, oak flooring, does not necessarily equate to excellence in care.

What is it about never judging a book by its cover . . .

 

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