Labour leadership contender Yvette Cooper has pledged that if elected she would introduce a “full” Living Wage, higher than that announced by the Chancellor in his Summer Budget, and ensure that care workers receive this wage before any other sectors. Ms Cooper’s proposals would bring the Living Wage in line with the figures recommended by the Living Wage Foundation, which argues that the Living Wage should already be £7.85 outside of London and £9.15 in the capital.
A mandatory Living Wage is undoubtedly a crucial requirement for the future of the care sector if it is to be improved. Care workers need to be paid a fair wage to ensure that the profession attracts and retains the skilled workers that are needed to deliver high quality care. In this respect, it could be argued that Liz Kendall’s campaign team have made an error by not supporting a similar policy themselves – as a former Care and Support Minister, and having openly supported a Living Wage before the Summer Budget, this seems to be an obvious policy for Kendall to use to solidify her credentials in the sector.
Yet while this policy would indeed benefit the social care sector, funding it could prove a headache for local authorities. Research published by the Resolution Foundation earlier this year highlighted that between 700,000 and one million care workers would need to be paid the Living Wage, at a total cost of £1.2 billion by 2020 (after higher tax revenues and lower levels of income support reduce the bill). This is clearly a staggering figure that many local authorities and care providers have already said they will struggle to meet at a time of cuts to public spending. Because health and social care is a sector that will struggle to increase productivity as a means of recouping costs, the only probable solution will be a commitment to increased funding from the government.
So politically, Ms Kendall may in fact have made the right decision to keep quiet on this, as the additional funding that it would require could damage her promises to reduce the deficit and the welfare bill that she believes are needed to show that the Labour Party has changed. Ms Cooper’s decision to call for the Living Wage for care workers has clearly been motivated by criticism of Labour’s disjointed response to the Welfare Bill, and her campaign would suffer less than Ms Kendall’s as it does not depend on these promises of change from past practices.
But the difficulties of paying the Living Wage to care workers is another example of the vicious cycle of health and social care that politicians of all creeds will struggle to solve. Demand for social care and the associated costs will only continue to increase, and there will eventually be a point when the amount being paid for services simply cannot be sustained. Ms Cooper’s social care announcement is an attempt to take a bold step to fix some of the problems that the sector faces, but one which will unfortunately cause more problems than it fixes.