The Government has ‘failed’ to resolve the ongoing sleep-in care crisis with the announcement of a new pay compliance scheme, social care disability providers warn.

A number of recent court cases found that carers who sleep on the premises of those they are looking after should be paid the National Minimum Wage (NMW) for the hours they are asleep.

HM Revenue & Customs (HMRC) is also currently pursuing providers for six years of back-pay — a move estimated to cost the social care sector £400m.

These two decisions has placed a heavy burden on a sector that is already facing a £2.3bn annual social care funding gap by 2020.

In an attempt to ease the burden the Government yesterday launched a new compliance scheme for social care providers which would give them up to a year to identify what they owe to workers.

Employers who sign up to the Social Care Compliance Scheme (SCCS) and identify arrears at the end of the self-review period will have up to three months to pay workers.

Those who choose not to opt into the scheme will be subject to HMRC’s normal enforcement approach.

Responding to the announcement of the new scheme, the Voluntary Organisations Disability Group (VODG) said this ‘fails’ to tackle the funding of sleep in care because it offers no assurances of how to fund the retrospective costs.

VODG chair, Steve Scown said: ‘VODG has been engaging with the members about unclear regulations and guidance since 2012, and making representations to Government since 2014.

‘Despite funding independent research, providing detailed analysis and information for the Department of Health as well as offering pragmatic solutions we find Government has done well to talk to itself, but not the sector.

‘The announcement raises lots of uncertainties and unanswered questions which we shall be taking to Government. This situation risks yet more unintended consequences as the limbo for providers and personal budget holders continues.’

Cllr Izzi Seccombe, chairman of the Local Government Association’s (LGA) Community Wellbeing Board, said the scheme was 'helpful' but did not resolve the funding problems.

'The fact that employers won’t have to settle any back-payment for sleep-in costs until March 2019 is helpful and buys some much-needed time to further understand the size and potential impact of the historic liability,' Cllr Seccombe said.

'But this announcement does not end the uncertainty for providers, care workers, the people they care for and their families, and those who pay for their own care or employ a personal assistant through a personal budget.

'It was misleading government guidance in the past which caused the confusion over whether National Minimum/Living Wage should apply for sleep-in shifts. Now the Government has clarified the position, it needs to provide genuinely new funding to deal with back-payment.'

'The focus of this announcement is very much on historic liabilities. The Government cannot ignore the additional costs of sleep-ins in the here and now, and into the future,' she added.

'It is wrong to assume the Spring Budget £2 billion for social care can cover this additional burden. The forthcoming Budget needs to inject new money into social care to meet this pressure.'

Matt Wort, partner and health and social care expert at the law firm Anthony Collins Solicitors, which has been dealing with cases arising out of the crisis, characterised the Government's recent move as 'ill-considered'.

'The lack of clarity in the new guidance is appalling – policymakers are urging care providers to self-assess their National Minimum Wage liability with no indication of how far back these payments may stretch,' he said.

'Businesses and individuals must not sign up to this self-assessment scheme until they have further clarity.'

For more on the sleep-in care crisis check out our feature here.