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Could the living wage be the 'death' of the care industry?

View profile for Alexandra Dean
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Under plans announced in the recent Budget, workers aged over 25 in the UK will be paid a minimum of £7.20 an hour from April 2016, rising to £9 by 2020.

Four major care home providers have commented this could cost the care sector £1bn by 2020.

In a recent BBC article Martin Green, the chief executive of Care England which represents the industry said: "Without adequate funding to pay for the National Living Wage, the care sector is at serious risk of catastrophic collapse." 

In an open letter to the chancellor it said staffing accounts for 60% of the cost of care. 

A government spokesman said: "The National Living Wage will benefit hundreds of thousands of care workers who will see their pay increase.

At Gepp & Sons Solicitors we can advise on all aspects of employment law. For more information and guidance, please contact Alexandra Dean on 01245 228141 or email deana@gepp.co.uk

This is not legal advice; it is intended to provide information of general interest about current legal issues.