“Goodwill does not pay the bills” – VODG submits representation to Low Pay Commission consultation

18 June 2021

VODG has today submitted a representation to the Low Pay Commission (LPC). The LPC sought evidence on the effects of the National Living Wage (NLW) and National Minimum Wage (NMW), to inform its recommendations for 2022 rates.

The VODG submission is informed by engagement with our member organisations via a dedicated meeting about the consultation, which Bryan Sanderson, Chair of the LPC, and LPC colleagues attended.

Throughout the submission, VODG highlighted issues most relevant to disability, care and support providers and the people they support.

Key points raised in the submission included:

  • Whilst social care work can be seen as noble in intent, it is also important to recognise that people work in the sector to earn a living, and to build careers. An important bedrock to these motivations must be a decent rate of pay.
  • Increases to the NLW and NMW have, in principle, always been warmly welcomed by providers. Social care is a labour-intensive sector, and the workforce should be recognised for the essential work they carry out. Indeed, given the impact care staff and the services they provide have on the lives of disabled people, the government should actively seek out solutions that lift disability services out of the low pay sector.
  • While fair and sustainable NLW and NMW rates represent an important step towards securing a sustainable workforce, they also represent significant, unfunded cost pressures for providers, particularly voluntary sector providers which do not recoup these costs through the local authority fees paid to them.
  • It is pertinent for the LPC to differentiate between the number of employees within the public sector, or funded from the public purse, and those of other industries, such as retail or hospitality. The latter are areas of the economy that can, if they choose, raise prices to in turn raise pay rates. This cannot happen in public sector services.
  • Providers want to pay staff at fair and reasonable rates for the type of work delivered and believe the fact that many social care workers are driven by strong values should not be used to maintain a low pay sector – indeed, “goodwill does not pay the bills”.
  • The key to implementation of NLW rates is affordability, which then supports sustainability. While in principle, our members believe in the NLW and NMW, and aspire to offer at least the RLW, the reality is that the books must balance to do so.
  • Many voluntary sector providers do not have confidence that future costs associated with NLW increases will be supported by uplifts from health and social care commissioning. This is counter-productive in an area struggling to recruit staff, especially now the UK has left the EU.

VODG also raised a number of key points related to the Supreme Court judgment on sleep in payments, including:

  • The practice surrounding the payment of sleep in shifts is not consistent across organisations and rates of pay are inequitable across the workforce.
  • While it is understood that it is not within the LPC’s current remit to consider pay for sleep in payments, VODG calls on the LPC to take urgent action. VODG believes that government must intervene and set a rate of pay for sleep in work following a process of consultation with workers, employers, commissioners, and other stakeholders. In particular, the government should instruct the LPC to consult, review and recommend a NMW rate for time spent asleep
  • Unless the LPC can establish a national sleep-in rate we will see more and more commissioners cut rates and providers will have to reduce levels of pay and employees will be worse off.

Dr Rhidian Hughes, Chief Executive of VODG, said:

“The current economic outlook and business conditions for voluntary sector providers of care and support services to disabled people is precarious. The pandemic has brought about additional and significant financial pressures for the sector as well magnifying long-standing systemic issues that are in urgent need of address.

“The reality facing many voluntary sector providers of social care services is that when the NLW goes up, there is rarely a corresponding increase in public funding.  So, while the government accepts the LPC’s recommendations, it does not also address the additional financial burden on the public purse. For providers this means that difficult decisions are constantly being made, often affecting the benefits and rewards that help recruit and retain a high-quality workforce.

“The last year has clearly shown that money is available nationally when there is a priority. VODG would urge the LPC to consider how it can further influence the government to prioritise funding, and encourage the Treasury to invest in social care pay to enable the workforce to be adequately rewarded.”

VODG Media Centre