MPs quiz government on social care back-pay bill

Social care charities have been given 15 months to repay an estimated £400m in back-pay for sleep-in providers

Conservative and Labour MPs have questioned the government’s position on the 15-month deadline for social care charities to repay approximately £400m in back-pay to sleep-in care workers.

Speaking in the House of Commons on Tuesday, Rebecca Long-Bailey, the shadow business secretary, asked Greg Clark, the business secretary, whether the government would commit funding to social care providers to pay sleep-in care workers back-pay of up to six years.

Sleep-in care workers were originally paid a flat-rate, but two employment tribunal decisions last year forced the government to change its policy and make the workers eligible for the minimum wage.

This led to HM Revenue & Customs pursuing charities for back-pay, which Mencap claimed could cost the sector as much as £400m, and led to a new government initiative, the Social Care Compliance Scheme, being announced last week to address the problem.

The SCCS gives social care organisations a year to work with HMRC to identify the amount of back-pay they owe, and an additional three months to settle any outstanding sums with their workers.

Long-Bailey told parliament that the government’s proposals had been branded “inadequate” and many charities felt they were “writing their own suicide notes” if they took part.

She asked Clark whether the government would “commit the necessary funding in the Budget to avert a crisis in the care sector, which could see many businesses struggle to survive, impacting on already fragile care services, and leave thousands of care staff without the wages they are owed”.

Clark responded that the interim proposal had been made to ensure a “robust” solution to the issue of back-pay could be formed by the government.

The government’s statement announcing the SCCS confirmed that it was talking with the European Commission to see if government support for the social care sector would contravene EU state-aid rules.

In questions to the business department, which also took place in the Commons on Tuesday, Peter Aldous, the Conservative MP for Waveney, said the SCCS “unfortunately adds to the uncertainty facing the social care sector” and urged the government to “get back round the table with the sector to find an acceptable long-term solution”.

Margot James, a business minister, said in response that the department was working with the Department of Health and the Department for Communities and Local Government to put pressure on the Treasury to provide a long-term solution to the back-pay issue.

Kevin Hollinrake, the Conservative MP for Thirsk and Malton, asked whether it would be sensible “to consider revisiting the legislation in this place simply to return to the pre-tribunal position”.

James said even if the government changed the law, which she said it certainly would not, “it would not have any impact on workers’ eligibility for historical back-pay liabilities”.

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Social care charities given 15 months to settle estimated £400m back-pay bill

An announcement by the government says the organisations have a year to identify what they owe sleep-in carers and a further three months to pay the arrears

Charities that owe back-pay to sleep-in care workers have been given 15 months to pay up to six years’ worth of arrears totalling an estimated £400m, under a scheme set out by the government.

The Department for Business, Energy & Industrial Strategy, the Department of Health and HM Revenue & Customs yesterday published the headline details of a voluntary scheme designed to encourage charities to pay back-pay to sleep-in care workers, which gives organisations a year to identify what they owe and a further three months to pay off the arrears.

But charities and lawyers criticised the announcement, with the learning disability charity Mencap warning that charities signing up to the scheme could effectively be “writing their own suicide notes”.

Sleep-in care workers, who are widely used in the sector to care for vulnerable adults, were typically paid a flat rate of between £35 and £45, with workers receiving either the national minimum wage or the national living wage for any hours actually spent providing care rather than being asleep, according to the Voluntary Organisations Disability Group.

But in the wake of two employment tribunal decisions last year, the DBEIS changed its guidance to ensure that the national minimum wage applied to sleep-in carers for the entirety of the time they are present.

Mencap estimated in the summer that the back-pay bill could cost the sector £400m and bankrupt many social care charities and providers.

Under the new Social Care Compliance Scheme, HMRC will begin writing to social care employers that have complaints against them for underpaying sleep-in care workers to encourage them to sign up to the programme.

Employers that choose not to take part “will be subject to HMRC’s normal enforcement approach”, the government said.

The statement from the government said it was looking at ways to minimise the impact on the charity sector, and was discussing with the European Commission whether any government support for the social care sector would contravene EU state-aid rules.

But the announcement has been met with fury from charities and representative bodies in the social care sector.

Mencap, which would owe £20m in back-pay and has said it would face closing 200 residential care homes and services and making 4,000 staff redundant if forced to pay, claimed the government’s announcement failed to provide reassurance to patients and staff.

Derek Lewis, chair of Mencap, said: “Three months on from the government’s commitment to seek a solution to the devastating £400m liability hanging over the sector, there is only the promise of further delay and no commitment, even in principle, to accept responsibility for a liability created by government changing the rules.

“Details of the scheme have not yet been made available. Many providers, particularly smaller ones, might be reluctant to take part in the absence of any funding assurance, concerned that they will be writing their own suicide notes.

“It is quite wrong that providers should be expected to subsidise the increased cost of on-going sleep-in care.”

Steve Scown, chair of the VODG, said the government had failed to consult properly with the social care sector, despite the VODG providing detailed analysis and advice to the Department of Health.

“The announcement raises lots of uncertainties and unanswered questions, which we shall be taking to government,” said Scown. “This situation risks yet more unintended consequences as the limbo for providers and personal budget holders continues.”

Rhidian Hughes, chief executive of the VODG, said: “Voluntary sector care and support providers are disproportionately affected by social care budget cuts because the people they mainly support are publicly funded. The sleep-in crisis is placing immense strain on the sector and we are calling on government to urgently identify a long-term and sustainable funding solution for social care.”

Martin Green, chief executive of the representative body Care England, said the government “needs to accept the responsibility for meeting the substantial costs of backdating sleep-in costs and take full account of the reality that the sector has been operating for years within very contradictory guidance”.

Matt Wort, a partner at the law firm Anthony Collins Solicitors, urged charities not to sign up to the SCCS until an appeal by Mencap about sleep-in care workers’ wages had concluded.

“This is once again an ill-considered move by government that could have a devastating impact on the UK social care industry,” Wort said.

“Local authority and NHS commissioners won’t have funded providers sufficiently for the shifts in question to compensate this shortfall. Forcing care providers to pay for its own mistakes and leaving essential services at the mercy of HMRC is both unethical and nonsensical.

“Businesses and individuals must not sign up to this self-assessment scheme until they have further clarity. Mencap’s forthcoming court of appeal case, due to be heard in March 2018, could change the position as to whether sleep-in carers are entitled to the minimum wage.”

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Mencap faces £20m back-pay bill for sleep-in staff, says chair

Derek Lewis says that if the government does not pay this bill, the charity could be forced to transfer its care facilities back to local authorities

The learning disability charity Mencap might have to pay £20m in back pay for sleep-in care workers, which could lead to the closure of 200 residential care homes and services run by the charity and up to 4,000 staff being made redundant.

The warning comes after a row with government over back pay for sleep-in workers, who are used widely in the learning disability sector to provide care for vulnerable adults. Until recently workers were paid a flat-rate, “on-call” allowance rather than the national minimum wage.

Derek Lewis, chair of Mencap, said the government should provide funding for as much as £400m in back pay owed by social care charities to sleep-in care workers, and said that if it failed to do so it could force Mencap to transfer the care facilities it runs back to local authorities.

He also warned that, although the charity began paying sleep-in care staff the national living wage from 1 April, 40 per cent of local authority commissioners had not yet agreed to pay the new rate, a situation Lewis said was “not sustainable”.

The flat rate for a sleep-in care worker is typically £35 to £45, with workers receiving either the national minimum wage or the national living wage for the hours they spend providing care, according to the Voluntary Organisations Disability Group, which represents charities that provide services to disabled people.

But in the wake of two employment tribunal decisions made last year, the Department for Business, Energy and Industrial Strategy has changed its guidance to ensure that the national minimum wage applies to sleep-in carers.

Earlier this year, HM Revenue & Customs began asking some disability charities to give six years of back pay to affected staff.

But the BEIS later said employers that had underpaid workers for sleep-in shifts before 26 July 2017 would have historical financial penalties waived and HMRC would suspend its enforcement activity about sleep-in care shifts until 2 October.

Lewis said that Mencap’s back-pay liability was approximately £20m, but the charity had only £19.6m in financial reserves.

“Funding back pay would require highly damaging actions to sell assets, cut programmes and cancel investment,” he said. “Our plans to improve the lives of those with learning disabilities could be set back by a decade or more as we struggle to repair the financial damage that would be caused by this liability.

“If government fails to fund or offers only partial funding, Mencap would be forced to take emergency action to hand back care services that do not cover costs to local authorities.

“Initially, this could result in the termination of care in more than 200 residential care homes and services, affecting more than 2,000 people who have serious learning disabilities. Between 3,000 and 4,000 dedicated care workers could face displacement or redundancy.”

Lewis has also criticised a Department of Health sample fact-gathering exercise on the extent of sleep-in care financial liabilities for being carried out “very late in the day”, with HMRC action against the charities due to resume in 25 days’ time.

“No one expected government to sign a blank cheque, but the process was very late in the day and hurried,” said Lewis.

“Scrambling to gather complex data in late August, when many people are away and tensions are running high, creates anxieties about the accuracy of information on which critical decisions will be taken.

“Concerns have been heightened by the government’s surprising refusal to share the results of this exercise with providers.”

The Department of Health is understood to be working with the social care sector on the issue and is expected to make a further announcement in the next few weeks.

A petition calling on the government to pay the £400m back-pay bill had been signed by more than 10,000 people as of this morning.

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Bill Gates donates £3.6bn to unknown charity

The Microsoft co-founder hasn’t stated which charity has benefited but it is believed to be his own foundation

Bill Gates, the co-founder of Microsoft and the world’s richest man, has donated £3.6bn to charity, according to documents filed in the US.

The donation, which is documented in an annual statement of changes in beneficial ownership filed with the US Securities and Exchange Commission, consists of 64 million Microsoft shares.

The shares are worth a combined £3.6bn, or $4.6bn, in the current stock market.

It is not yet known which charity will benefit from the donation, but media reports suggest the likely beneficiary will be the world’s richest charity, the Bill & Melinda Gates Foundation.

The foundation was set up in 2000 with a donation from Gates of approximately $5bn.

The donation amounts to approximately 5 per cent of Gates’ wealth, and reduces his shares in Microsoft to 1.3 per cent, according to Bloomberg.

Gates has donated significant amounts of his wealth to charity over the past two decades, and in 2010 set up the Giving Pledge with the US billionaire Warren Buffet.

The Giving Pledge commits billionaire philanthropists to give away more than half their wealth to charitable causes, and more than 170 wealthy individuals, couples and families have so far signed the pledge.

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