Budget 2015: Social care providers will struggle to pay new living wage, say charities

Vulnerable and elderly people will be left competing for increasingly 'rationed' care as providers struggle to pay the new national living wage to workers

Rising numbers of vulnerable and elderly people will be left competing for increasingly 'rationed' care as providers struggle to pay the new national living wage to workers (Getty)

There is a risk of a staff funding crisis in the social care sector unless it receives an injection of cash, charities are warning.

“More and more” vulnerable and elderly people will be left competing for increasingly “rationed” care as providers struggle to pay the new national living wage to workers, a coalition of charities and care providers said in a stark message to the Government.

The new wage level of £7.20 an hour for the over 25s, which will be compulsory for employers when it is introduced next year, is likely to be broadly welcomed by the 930,000 frontline care workers – two thirds of whom earn below the current Living Wage of £7.85 per hour or £9.15 in London, according to the Resolution Foundation think-tank.

However, local councils are expected to cut £1.1bn from their social care budgets this year, on top of a drop of a third in social care spending since 2005 – to £5.46bn. This comes as the elderly population grows.

Martin Green, of Care England, the charity, said that unless the measure was properly funded, it “could lead to a reduction in provision and even more pressure placed upon the NHS”.

He added: “Nobody in this Government seems capable of understanding that the level of funding is totally inadequate. They must heed the warnings of many independent commentators, and the NHS, that unless they put more money into social care, the system is in danger of collapse.”

Caroline Abrahams, of Age UK, said: “The living wage will provide a really important boost to care workers, but unless the overall budget is also increased, we fear more and more older people will miss out on the support they badly need.”

A Local Government Association spokesperson said it expected “new burdens to be fully funded” by central Government. The Treasury is yet to comment.