Local authorities are projected to fund over half (52%) of increased labour costs passed on by providers as a result of the fair pay agreement for social care, analysis has fund.
An impact assessment carried out by the DHSC found the NHS would cover 17% of the increased labour costs with self-funders paying for almost a third (31%).
The assessment forecasts a 2.8% wage increase in 2028/29 is possible given the £500m made available for additional local authority expenditure, which, on top of the increase in the National Living Wage, would mean a pay uplift of 5.1% between 2027/28 and 2028/29.
The DHSC said that on the basis of current funding an adult social care negotiating body could introduce a pay floor that is 68p above the expected NLW in 2028/29.
Speaking to Healthcare Management this month, Professor Martin, chief executive of Care England, said the policy was ‘completely unfunded'.
‘With only £500m on the table, when the funding gap is over £4bn, it won't touch the sides,' Green said.
Prof Green warned segmenting the funding only to publicly funded care risks deepening disparities between services that already operate on tight margins.
‘Providers with mixed client bases are being asked to find the extra money themselves. It's disingenuous,' he said.
Lee Peart is editor of Hemming Group’s Healthcare Management magazine.
