Home Care – The Problem

Home care is in crisis because of a number of factors, the chief of which is that there is not enough money in the system to deliver an effective service. Budgets for local government have been cut and they in turn have reduced the amount of money that they spend on social care. Most social care is delivered by private companies who tender for contracts. Contracts are awarded on the basis of price and quality; quality is judged on a written submission which may bear no relation to the reality of the service that will actually be delivered. Winning therefore comes down to price and the winning price is achieved by cutting costs and that means exploiting the workers. T’was ever thus.

Most councils require a single hourly price, 24/7, 365 days per week which is divisible by 4, so a 15 minute visit costs a quarter of an hourly visit. Most councils also require a fixed price which is held for 3 years with no reviews. So an agency has to estimate what their costs will be 3 years down the line and what they will have to pay their staff. If they get those estimates wrong, they either over-price and don’t win or they under-price and struggle to deliver a good service. It is not an exact science.

Care workers are paid an hourly rate and are generally paid at half this rate for a half hour, a quarter for a quarter of an hour and so on. If they are lucky they will receive a premium for working at the week-end and on bank holidays although these have  largely disappeared in favour of a flat rate over 7 days. In other words what the junior doctors are fighting about, care workers have put up with for years and nobody took to the barricades for them. They are supposed to be paid for travelling time but in reality they aren’t. They also ought to be paid for their travel expenses but generally aren’t and they ought to be paid for attending training but generally aren’t. There is a widespread belief that private companies exploit their workers for ideological reasons and because they’re greedy and want to keep the money for themselves; I’m sure some do but in my experience the vast majority of home care agencies would love to pay their staff more money, but the economics mean they can’t. And so the system makes villains of us all.

In its tender document a council will quite often set out its own view of what it believes the service will cost and will sometimes actually set the price itself or set a maximum price that can be charged. Why does a local authority believe that it knows how to run a home care business? I would not presume to tell a council how to run its affairs and invariably their understanding and awareness is completely wrong.

Establishing a price for running a home care contract is not an exact science and contains a large number of variables. Key to this is establishing what proportion of work is delivered during the day, the evening and the week-end and what proportion of visits are 1 hour, 45 minutes, 30 minutes and 15 minutes. This is essential if care workers are paid enhancements for working week-ends and part hours if it is to be absorbed by the single hourly rate. Get this wrong and the consequences can be disastrous. However, often a local authority does not have this information or more usually is not prepared to share it.

Making an accurate estimate of potential future volumes of business is also crucial to planning and financial modelling but again a local authority either gives widely varying estimates or refuses to give any estimate at all. Caveal emptor indded!

Some Councils have decided that the London Living Wage (currently 9.30) is a good thing. This is sometimes ideological and sometimes the Mayor wishes to drive around his or her fiefdom, leaping out of the Mayoral limousine and accosting workers.

‘And what are you paid for working in this fine borough, young man/woman?’

And the hard-pressed workers will smile or curtsey (or whatever you do to a Mayor) and say:

‘Thanks to you, oh worshipful mayor, I get the London Living Wage.’

‘Carry on!’

However this is not necessarily the simple panacea it might appear to be. Currently the LLW is £9.30 per hour. But it is only expressed as an hourly amount; it takes no cognizance of part hour working. So a half hour would be paid at 4.65. But if you paid more for half an hour than half of the hourly rate (on the logical basis that you can’t do 2 half hour visits in an hour) and the vast majority of visits were half hour then you would actually be giving people a pay cut.

And because 9.30 doesn’t include any travel time (for which the Care worker doesn’t normally get paid) then they are not actually being paid 9.30 per hour.


9am to 10am £9.30

10.15 to 11.15 £9.30

The person has ‘worked’ for 2.25 hours but has only been paid for 2 hours.

However most councils either do not understand this point or would prefer not to think about it. The council also does not understand that having committed to wanting the LLW they must be prepared to review their price each year in order for the agency to accommodate increases in the rate. This is incompatible with a fixed price contract.

Also, as the pay increases the employer’s national insurance cost also increases. And an employer has to factor in the costs of holiday and sick pay as well as pension costs. I remember meeting with the contract manager from a local authority and trying to explain that paying 9.30 per hour incurred a significantly greater cost to the provider because of these extras.

‘But you don’t have these costs,’ I was told. ‘All your people are on zero hours contracts so they don’t get all that stuff.’

‘I beg your pardon,’ I said. ‘What makes you say that?’

‘We had a consultant in and they told us.’

I had to explain that a zero hours contract simply meant that someone didn’t have guaranteed hours of work; they still had the same employment rights as anyone else.

So, how do home care agencies manage? Well they don’t always which is what happened to us. But mainly they survive because of two factors:

  • An army of dedicated, mainly foreign, underpaid hard-working people.
  • Who are ruthlessly and usually unlawfully exploited.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s