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Living wage housing associations can't compete for care contracts

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Living wage housing associations can't compete for care contracts

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Published by Jon Land for 24dash.com in Housing

Living wage housing associations can't compete for care contracts Living wage housing associations can't compete for care contracts

Image: Housing via Shutterstock

Housing associations who opt to pay their employees a living wage are effectively ruling themselves out of winning domiciliary care contracts, writes Jon Land.

That was the verdict of senior housing professionals attending a care and support discussion organised by the PlaceShapers group and 24housing magazine.

Juliann Hall, director of care, health and wellbeing at South Yorkshire Housing Association (SYHA), said her organisation had done "an awful lot of hand-wringing" on the issue before deciding against becoming a living wage employer.

"We've just had a 12-month debate on the issue of becoming a living wage employer and because of the targets we've set it would have been tying one hand behind our back in the care and domiciliary care market," she explained.

Tony Stacey, SYHA chief executive and chair of the PlaceShapers group of housing associations, added: "By looking at the competition, we couldn't find the regular care providers who were paying the living wage and we said if we're going to compete in this market, we've got to be below it. We're not disastrously below and it's only a small number of people and it's not the frontline staff but nevertheless we don't want to be hypocrites about it."

Mr Stacey said the problem was due to the commissioning process.

"In just about every contract that goes out, there's a price element and there's a quality element. Commissioners will say it is 50/50 or 80/20 quality to cost but they fix the target hourly rate in the price so if you're over that you're effectively ruling yourself out anyway," he explained. "On top of that, a lot of the competition are then discounting on top of the target rates.

"In Sheffield they [the council] have said, we will be a living wage employer but it doesn't trickle down through the commissioning process."

Duncan Forbes, chief executive of Bron Afon Housing Association, said the minimum wage for people in domiciliary care in his locality was effectively about £5 an hour. "We wouldn't dream of employing someone on that little," he explained.

Sarah Castro, Poplar HARCA's programme lead for community budgets, suggested that, if the living wage was not an option, in-work benefits could be used to top-up salaries.

But she said that as an organisation Poplar HARCA was not interested in the domiciliary care market if it meant not paying people the London living wage. "We simply wouldn't go there," she said.

Alan Lewin, chief executive of Axiom Housing, added: “Once you go into domiciliary care you’re up against some of the meanest private sector companies (and when I say mean, I’m talking most efficient).

“They are able to come up with massive economies of scale that effectively drive local providers out of the market. Out of our three extra care schemes, we use big private companies to provide the care in two of them. We would like our own people in there but it’s very difficult.”

A full report of the roundtable appears in the September edition of 24housing magazine, out this Friday (September 5).

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