Agenda item

Report of Assistant Chief Executive

Antony Dixon, Strategic Commissioning Manager, presented a report on the National Living Wage consultation proposals, highlighting the following points:

(a)  the report is concerned with the National Living Wage inflationary uplift, which the City Council is contractually obliged to consider in respect of social care provision;

(b)  modelling has been undertaken for each sector of Adult Social Care provision, and uplift has been proposed based on this analysis;

(c)  The modelling has assumed that uplift will be paid to the entire workforce regardless as to whether they are under or over 25;

(d)  the modelling is not based on organisations current rates of pay, as we have not had open-book discussions with them, it is based on an assumption that workers are currently paid National Minimum Wage;

(e)  the uplift will be applied to those companies we contract with through a framework agreement, and not those currently engaged in spot-contract work;

(f)  the uplift will also apply to Direct Payments and Adult Placements, as there is a desire not to disincentivise these forms of provision;

(g)  it is not clear whether companies can be contractually obliged to offer the same uplift to those staff under 25 years old, but this will be investigated.

RESOLVED to:

(1)  approve proposals which will be consulted on with service providers for inflationary uplift in 2016/17 as detailed in paragraph 2.7 of the report;

(2)  delegate authority to the Assistant Chief Executive to increase contract values in accordance with the proposals detailed in paragraph 2.7 of the report, subject to the outcome of consultation and agreement of the Council budget;

(3)  approve the spend associated with this decision in 2016/17.

Reasons for recommendations

(1)  The Council is legally bound to consider inflationary uplift in respect of services that it has a duty to provide.  Market intelligence indicates that a significant section of the adult social care workforce is paid at an hourly rate below the National Living Wage to be implemented from April 2016.

(2)  In accordance with legal obligations the Council will consult with adult social care providers with regard to these proposals. The Assistant Chief Executive will take account of consultation responses and issue variations to existing contracts should no significant issues arise

Other options considered

(1)  Not to offer inflationary uplift to social care providers to meet national living wage requirements.  This option was rejected as three is considerable evidence that a significant section of the workforce is currently paid a level below National Living Wage and, in some areas of provision, capacity issues are starting to emerge due in part to a difficulty in recruiting and retaining staff.

(2)  To undertake analysis of individual provider costs and offer uplift based on actual wage rates paid.  This option was rejected as it will be administratively burdensome and problematic.  Rates and methods of payment are not standard across the sector and there is not always a direct correlation between low rates of pay and low hourly rate of service delivery.

(3)  Not to impose a cap on inflationary uplift for some forms of provision. This option was rejected, as whilst the Council needs to ensure that service providers are sufficiently remunerated to enable them to meet National Living Wage requirements it also needs to take account of financial pressures as a result of on-going cuts in government funding.