The views and concerns of a good client and friend of Incentive FM Group, Robert Kilgour, who owns and manages a care home business in Scotland.
I am a strong supporter of the new national living wage (NLW) which the UK government announced in 2015. The NLW will start at £7.20 an hour (outside London) in April 2016 for all workers over 25 years of age and will then rise to a minimum of £9 an hour (outside London) by April 2020. It simply can’t be right that someone gets paid more for stacking supermarket shelves than for caring for our vulnerable elderly. I genuinely believe that our hard working care staff deserve to be paid more for the excellent job that they do.
The new NLW should also help care homes improve staff recruitment and retention thereby cutting expensive staff agency costs. However, as about 75% of our residents are local authority funded and between 60-65% of our fee income goes on total staff costs, it is only fair that government help fund its introduction. (As well as the increases needed for staff currently paid just above the NLW level.)
Scottish local authorities and the Scottish government currently pay all of their own staff, including their care home staff, the ‘living wage’ set by the Living Wage Foundation – currently £8.25 an hour for outside London. However, they are refusing to pay voluntary and private care home providers sufficient fees to pay our staff similar rates. They say that they can’t afford to do so – what double standards.
Fife Council’s current average weekly operating costs per person across all of their residential care homes is over £900 per week. Edinburgh City Council (ECC) recently spent £134,000 per bed building a 60-bed care home excluding the land cost as it was already owned by the ECC. East Lothian Council has just spent £163,000 per bed building a 60 bed care home also on land that they already owned. (All figures obtained from through recent freedom of information requests.) It is worth noting that most independent care home operators would look to spend no more than £75,000 per bed excluding land costs on building a fully compliant new care home.
There is a well understood UK wide shortage of trained nurses and Scotland is no different in this regard. A recent care home survey carried out by Scottish Care showed that there was an approximate shortfall of about 1,000 nurses in the Scottish care sector. Another issue in Scotland that we frequently face is some local authorities trying to place nursing care clients at residential care rates – a move that we firmly resist whenever it arises.
So what’s the solution?
I feel very strongly that the Scottish government should urgently set up an independent review of all care home costs across all of the sectors involved in elderly care, including NHS elderly care wards. There should be a ‘level playing field’ in this area and an ‘open book’ policy on cost to the taxpayer.
I would also like to see a cap on agency staff rates as has recently been introduced within the NHS in England. More nurses urgently need to be trained and the Scottish government is looking at doing this but it will take several years to replenish the gap. In the interim we will need to continue to recruit from overseas. Interestingly, a Scottish Care Inspectorate pilot scheme is currently underway with care home operator HC-One, where SVQ3 qualified carers are given extra training so they can take on some of the tasks currently reserved for qualified nurses. This, obviously, reduces the dependence on nurses. The introduction of this scheme across Scotland is critical to the future survival of Scottish care homes. In conclusion, although this is a very challenging time for the UK care home sector, I remain optimistic about the future.
We now have clarity over the future of our biggest cost – wages. Therefore, it is surely only fair and reasonable that we are given the same clarity over our local authority fee income so that we can plan for the future, invest in our facilities and, for some, stay in business. There is simply no fat left in our businesses after the last 10 years for us to fall back on and if this clarity is not forthcoming very soon: older care homes will close; planned new build care homes will not go ahead; we will see a net loss of care home beds; and there will be a huge increase in NHS bed-blocking, a rise in cancelled operations and intolerable pressure on the NHS. All this just when, as shown by the demographics, we need more care home bed provision.
In April 2015, Scottish local authority care home fees were increased by 3.8% on the condition that care homes immediately paid all of their care staff, irrespective of age, a ‘care minimum wage’ of £7 an hour.
This increase was funded by care home operators and Scottish local authorities with an additional significant financial contribution made to the settlement by the Scottish government. Currently, Scottish local authorities pay £609 per week for nursing care and £524 per week for residential care if you honour the ‘care minimum wage’.
The new Health & Social Care Partnerships (roughly a Scottish version of the Better Care Fund in England) also came into being in April 2015. It is responsible for strategic planning and commissioning and will, when fully established, have oversight of a ‘pooled budget’ for all services for adults and older people.
Care homes in Scotland negotiate fee rates and discuss other issues set out in the National Care Home Contract through their umbrella organisation, Scottish Care. The party Scottish Care negotiate with is COSLA (the Convention of Scottish Local Authorities) which acted for all 32 Scottish local authorities. It has, however, split and four councils, including Aberdeen and Glasgow, have left COSLA and formed the Scottish Local Government Partnership. It is too early to tell what impact this split will have on this year’s care home fee settlement.
Robert Kilgour is founder and chairman of Renaissance Care, which has 11 care homes throughout Scotland and in 1989 he was the original founder of Four Seasons Health Care.