Care provider ends contracts with two councils over "unacceptable" rate offers

A leading care provider has served notice on two North West councils over the “unacceptable” rates they are offering care workers.

According to Mears Group, Liverpool City Council has made a proposed change to the hourly rate of just £13.10 for home care, while Wirral Council was offering £12.92 – “both of which are nothing short of encouragement to providers to breach the National Living Wage”, the company claimed. The National Living Wage is £7.20.

Mears Group said the proposed charge rates fell “well short” of the minimum £16.70 recommended by the United Kingdom Homecare Association (UKHCA), which represents the care industry.

It argued that “no organisation could legally deliver the care service required at the rate proposed by the councils”.

The group’s Executive Director, Alan Long, said: “Our top priority is to provide a quality service to people requiring care with well-deserving staff being paid a decent wage.

“As such, the new offers by Liverpool City Council and Wirral Council represent extremely irresponsible – possibly illegal – action that we and others will have to challenge at every level.”

Mears Group highlighted how the change in minimum wage to the new Living Wage had seen an increase in cost to providers of 11%, with further changes taking this to 40% by 2020.

Long said: “The new rate is in direct conflict to [the objectives and values set out by the two councils] and, while we have sympathy for the financial pressures on local authorities, we have no sympathy for any council that is bullying providers into operating illegally.”

He added: “This is the first time Mears Group has ever had to take action of this nature, but we will not operate in an illegal way and we do not see how any other provider can do so either. The people who will suffer the most are those receiving care and that is completely and utterly unacceptable.

“We will of course support any transition of services to new providers, but have major doubts that any provider could operate legally and effectively at this rate. It will be hugely unsettling for service users and staff, and would not be required if the councils deliver on their responsibilities.

“I hope that both councils can see sense and be prepared to change this unacceptable position.”

Liverpool City Council’s Cabinet member for adult social care and health, Cllr Paul Brant, said: “We have contracts with 11 home care companies and are working positively with them. The proposed rate, which will cost the council an additional £2m per year, reflects the new National Minimum Wage and allows firms to make a reasonable profit on top.

“Mears are a company based outside the City Region without the long experience and economies of scale of many of our local providers. Mears only provide a small share of local provision, but we will continue to work closely with them to ensure a smooth transition. Their staff will simply transfer across to other providers in the city, meaning there will be no disruption in the home care provided.

“As everyone knows, we are facing huge challenges due to cuts in our funding from central Government, and in calculating rates we look closely at the amount paid by other local authorities in the region. In the case of Mears we did offer to work with them to help reduce their overheads, and we are sorry they have instead chosen to pull out of the region altogether.” 

Graham Hodkinson, Wirral’s Director of Adult Social Care, said: “Earlier this year, Wirral invested an additional £3.35m in increasing fees to the care sector to help meet the growing gap between the money they receive and the care they need to deliver. This was more than £1m over the figure that the Government  allowed us to raise via the budget precept for adult social care.

“Wirral has a clear commitment to good quality care for the residents of Wirral. The providers we use offer a vital service, and we will continue to work with them.”