To ask Her Majesty’s Government what steps they are taking to support (1) the care sector, and (2) those receiving care, in the light of the retrospective change in guidance on the application of the national minimum wage to sleep-in shifts for care workers.
My Lords, we recognise that the historic liabilities associated with the national minimum wage for sleep-in shifts present a challenge to the financial position of many care providers. The Government have been working with representatives of the social care sector to understand how liabilities for back pay for sleep-in shifts impact on the provision of care for vulnerable people. We are exploring options to minimise any impact on individuals and the sector.
The Minister will be aware of the considerable stress and anxiety faced by people with learning disabilities and their families about the likely loss of service providers. People with personal budgets who directly employ support staff fear being made bankrupt if they are found to owe arrears to them. We have been aware of this issue for some time now. Will the Government commit to funding these historical liabilities for sleep-in shifts and end the stress and anxiety which is now prevalent within this sector?
We absolutely recognise the pressures that this has caused for providers of all kinds, whether they are large providers of social care or those with personal budgets in receipt of direct payments. I should point out that HMRC is working with local authorities where they are providing funding for direct care, so it is not just a discussion between individuals and HMRC. Local authorities are involved as well because they clearly need to look at the budgets they are providing to make sure they are adequate to pay for existing costs. We are looking at all the issues around historic liabilities, but I am afraid that I cannot give the noble Baroness the commitment she is asking for today.
My Lords, I declare my links with Mencap as shown in the register of interests. Will the Minister tell us what contingencies the Government have put in place to fund the services received by people with a learning disability to cover their financial difficulties arising from the Government’s decision not to fund historic liabilities on account of sleep-in shifts?
It is not our position that they will not be funded. That is one of the options being explored at the moment. A huge amount of work is going on with providers and all parts of government. In the end, however, the Care Act 2014 means that local authorities have a responsibility to take on the commissioning of and, ultimately, provision for providers, if they are looking at exiting the market, to make sure there is proper and comprehensive provision in the local area.
My Lords, it is absolutely right that sleep-ins are defined as working time and therefore subject to payment of the national minimum wage. However, the Government’s November compliance scheme proposal not only failed to offer support for hard-pressed providers but also means that thousands of care workers, who are among the lowest paid in society, could be waiting until March 2019 to get paid what is owed to them. Does the Minister agree that these low-paid workers should not have to pay the price for the Government’s £6 billion cuts in social care or their failure to take action on addressing the social care funding crisis?
I am grateful that the noble Baroness has raised the compliance scheme. For those providers that enter it, the scheme offers the opportunity to take 12 months for self-review and then report to HMRC, which will then allow a further three months for the providers to pay. That gives a 15-month leeway compared with the usual default enforcement period of 28 days. There is clearly a balance to be struck between the financial challenges posed to providers and the money that staff, rightly, need to take. I think that the compliance scheme provides that balance so that we can do it in a way that is sustainable.
My Lords, I declare an interest in that my wife requires 24-hour care. I am sure that my noble friend is aware of the impact of the backdating of this decision on so many people, not least charities such as Mencap, which will become seriously financially embarrassed unless some help is forthcoming. The amounts are enormous to such charities, but they are really pretty small beer compared with overseas aid, for example, and I hope the Government will look to their priorities in that respect.
I absolutely recognise the picture that my noble friend paints. We know the impact of the decision on backdated pay on those providers of social care of all kinds—charities, families and others. We are looking carefully at this, and there is a market analysis going on at the moment to find out the number of affected providers, the number of affected staff and the overall cost implications. Discussions are taking place with the European Commission to make sure that whatever route we take, we know it will be legally possible.
My Lords, these providers have been hit this year with a bill of £400 million. HMRC has given a one-month deferment of its decision, which is not enough time for them either to raise the money or to make alternative arrangements. Does the Minister agree that this can only be solved satisfactorily, without detriment to people with learning disabilities and people who are cared for, if there is a rescheduling of the liabilities? Are the Government looking, with HMRC, at drawing up a longer deferment schedule to allow them to raise the money?
Again, I would point the noble Baroness in the direction of the social care compliance scheme that has been set up, which allows precisely that deferral of payments. It allows for a period of up to 15 months for assessments to take place while providers work with HMRC to provide the payment. I should also point out that although HMRC would usually levy fines in the case of underpayment of taxes after 28 days, those fines have been waived in these cases, as one would expect.