Brent moves towards paying London Living Wage to care workers but rejects moving to in-house provision

The Community and  Wellbeing Scrutiny Committee will consider a report LINK on September 4th outlining the issues facing the provision of child and adult social care in the borough. The Council wishes to fund private providers sufficiently to pay their workers the London Living Wage, wants them to move away from zero hours contracts (unless workers prefer them) and comply with Unison's Care Charter. To do this they want to introduce a 'patch model' with fewer providers in particular areas so that there is improved performance and better quality relationships with care recipients as well as support some specialist care providers.

The change will be costly with Adult Social Care costing £10million more if the changes are implemented in 2020-21. The report rejects bringing Social Care in-house (the Council running the service) on grounds of viability and risk.

Key extracts from the report:

Paying the London Living Wage

The current cost model allows for providers to pay at or above the National Living Wage, which is £8.21 per hour, but does not enable them to pay London Living Wage, which is £10.55 per hour. Therefore, there are clear cost implications to the Council in paying at London Living Wage levels. 


The Council has a clear commitment to paying LLW where possible, and no one would argue this is not the right thing to do. However, it is worth noting that there is no evidence, locally or nationally, that paying care workers above NLW has any impact on the quality of care. Regardless, discussion at PCG and at CMT has concluded that the Council will offer LLW as part of the new homecare model. The debate therefore is how quickly this can be delivered. 


Within Adult Social Care we have a strong record of price control, although expenditure has increased year on year due to increases in complexity of packages and hours of homecare clients are receiving. However, both the external price analysis and intelligence from our own commissioning function has indicated that Brent now pays one of the lowest hourly rate in North West London. Other boroughs that have re-commissioned services are paying in the region of £18 per hour. The combination of a lack of available home care workers (The Institute of Public Policy Research estimates that nationally the industry will need 400,000 additional carers by 2028) and the fact that Brent is now one of the lowest paying boroughs in NW London have both contributed to the need to review our existing model to ensure the market remains sustainable in the future. 


Ending Zero Hours Contracts 

Currently 38% of care workers in Brent work on zero-hours contracts. To mandate that providers don’t use zero-hours contracts and instead offer minimum-hours contracts would inevitably have an impact on the way that they are able to organise their staff rotas to deliver care. There are peaks in the demand for homecare services. Unsurprisingly they are in the morning, lunchtime and evenings. Providers don’t want to have to pay care workers when they aren’t delivering care; the council doesn’t want to pay providers more than is necessary to deliver quality services. 


Through discussion with providers, we are also clear that the biggest incentive for a reduction in the use of inappropriate zero-hours contracts will be being able to offer providers a guaranteed level of hours and funding. This can be achieved through reducing the number of providers and implementing a patch based model. This would give providers a clear and consistent number of hours to work with so that they can plan their workforce requirements accordingly. The more confident the council can be in guaranteeing hours of work, the easier it will be for providers to plan their rotas and not have to fill in gaps in provision with zero-hours workers. 


However, it is known that in some instances, zero-hours contracts are the preferred option of homecare workers. Our aim is that where workers would prefer a standard contract and a guaranteed minimum number of hours, this is available to them, but that we allow providers the flexibility to offer other contractual mechanism such as zero-hours contracts, or casual and short term contracts where appropriate (for example for when individuals wish to work during term time only, or to cover extended leave or maternity cover) 


Providing Social Care In-house 

Consideration has been given as to whether homecare services could be brought back in house. The challenges of doing this would be considerable. Firstly, the cost of an in-house service has been modelled, focusing on staff costs alone (not including other overheads, such as premises, equipment, etc). Officers estimate than the annual cost of an in-house homecare service for Adult Social Care only would be £34.4m per year by 2023/24, compared to £27.9m, which is the modelled cost of a commissioned service including LLW. More work would need to be done to model the costs of a Children’s service, but it is likely to be more expensive than a commissioned service. 


The modelling is based on needing 750 carers, 50 supervisors and 14 additional managers (Team Leaders up to a Head of Service) which is an extremely conservative estimate of the staffing required. Staffing ratios would need to be considered – the service has been modelled on the basis of 1 supervisor to 15 staff. Officers have also assumed that staff would be working on permanent contracts, and there would be no use of zero hours’ contracts. 


There are a number of factors that make in-house homecare services more expensive than services commissioned from external providers. It needs to be recognised that many homecare providers are working with few overheads and little organisational infrastructure. It is not uncommon for smaller providers to be led by a manager / owner, who will perform a number of roles within the organisation, and also directly deliver care when needed. The flexibility that this gives providers can’t be replicated if the service was to be brought back in-house. 


Providers are also able to manage their workforce so that they are not working during parts of the day when demand for homecare is much lower. There are peaks in demand in the morning, lunchtime and evening, with little demand between times. Whilst providers use zero-hours’ contracts to help manage this (and it’s agreed we want to reduce their use), the council would not have this option. Therefore, an in-house service would be paying for staff 
at times when they would not be working to full capacity, adding to the cost of services. 

Market sustainability would be an issue if Brent was reliant on one, in-house provider and would bring into question our ability to meet our Care Act requirements with regard to market sustainability and choice. There would also be considerable risk in having one provider, and whether we could ensure we could manage the various issues that arise when delivering homecare, such as safeguarding issues, quality management and workforce considerations and customer satisfaction. 


Given that homecare services have been commissioned from other providers in recent years, the council has no experience in managing a homecare service. This expertise would need to be brought in to ensure that services were run in line with rules and regulations, (for instance, the service would need to be CQC registered before care could be delivered) as well as ensuring it was as efficient as possible, making best use of staff time and resources. At this stage, progressing this option is not recommended. 


The report argues that the proposed changes would meet Unison's Care Charter but these claims rest on successful re-procurement and will need to be probed at the Scrutiny meeting.

Unison Care Charter

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