Official Report 723KB pdf
Our next agenda item is an evidence-taking session on a supplementary legislative consent memorandum on the Employment Rights Bill. The purpose of the bill is to deliver the key legislative reforms that are set out in the United Kingdom Government’s plan to make work pay. The bill’s explanatory notes state that its purpose is to
“update and enhance existing employment rights and make provision for new rights; make provision regarding pay and conditions in particular sectors; and make reforms in relation to trade union matters and industrial action. It further creates a new regime for the enforcement of employment law.”
An earlier LCM, lodged on 11 December 2024 by the Cabinet Secretary for Finance and Local Government, was referred to the Economy and Fair Work Committee, which considered it on 19 March. A supplementary LCM was lodged by the Cabinet Secretary for Health and Social Care on 3 April and was referred to this committee. It relates to provisions in the bill concerning social care negotiating bodies, which are included in part 3, chapter 2, with further consequential amendments in schedule 5.
The committee is due to take evidence on the supplementary LCM from the Minister for Social Care, Mental Wellbeing and Sport at its meeting next week. In today’s evidence session we will hear from a panel of stakeholders. I welcome to the committee Lesley de Jager, director of people and culture, Cornerstone, who is attending on behalf of the Coalition of Care and Support Providers in Scotland; Karen Hedge, deputy chief executive, Scottish Care; and Dave Moxham, deputy general secretary of the Scottish Trades Union Congress. We will move straight to questions.
The supplementary legislative consent memorandum is part of the process of our National Care Service (Scotland) Bill, which is now the Care Reform (Scotland) Bill. To what extent could a sectoral negotiating body for adult social care achieve the Scottish Government’s aspirations for a national care service in relation to embedding fair work principles?
I remind everybody that I am still a registered nurse.
Thank you for having me here today. The definition of the type of negotiation that we will have should be considered. There is a question about parity—you see that in the current LCM. We have discussed that with trade unions, the Government and the Convention of Scottish Local Authorities.
On the issue of whether there is sectoral or collective bargaining, at the moment, due to the current negotiation arrangements, there is disparity between what can be accessed by people who work in the independent sector—whether they are working for private organisations, charities or employee-owned organisations—and by those who work in the statutory sector. For example, people working in the statutory sector have negotiated having their Scottish Social Service Council registration paid for. There is, therefore, a need to define whether we are talking about sectoral or collective bargaining.
The question of whether we would have parity with staff who are outsourced also applies in relation to the LCM. The issue is incredibly important and it is good that the committee is considering it as we progress with both the Care Reform (Scotland) Bill and the Employment Rights Bill. Our intention would be that that detail would sit in the care reform bill.
From a trade union perspective, during the process around the various iterations of the Care Reform (Scotland) Bill, it has always been a priority for us to establish an underpinning of pay and terms and conditions for staff in the sector. That has been particularly relevant for staff who are not covered by other bargaining arrangements, such as agenda for change or the local authority rate.
As we are deliberating on how the legislation down south relates to devolved issues and the procurement-related sector here, it is welcome that the discussion is taking place and that sectoral collective bargaining—I take the point about the slight differentiation there—is high on people’s agenda.
Things could always happen more quickly, but we are relatively positive about the developments that have taken place over recent years in taking forward the potential for bargaining architecture, and I agree with Karen Hedge that the care reform bill should legislate for that. I think that our job now is just to work out how, in legislative competence terms, that best interacts and engages with what is happening down south.
One of CCPS’s concerns around the progress of legislation is that we need action now. We cannot wait for statute to make improvements to social care workers’ pay—there is a desperate need for change.
As Dave Moxham noted, we have been developing a model over the past three years, which is, for all intents and purposes, ready to go on a voluntary basis—getting it up and running does not require a statutory underpinning, as it has been pretty much ready for some time. How long would the regulation-making process further delay our start? How many more Scottish people would be waiting to have their needs met or would have them poorly met because of high turnover and chronic staffing shortages? Care workers are continuing to struggle to make ends meet, despite being highly skilled and qualified key workers who do really demanding work.
Our request is that we not wait for legislation. We have a model that is ready to go. You have heard a reference to agenda for change and the progress that other national collective bargaining models have been able to make in improving terms and conditions. We do not need the legislation to be in place to improve pay and terms and conditions for the rest of the workers in the sector; we can move on that now.
That answers what my next question was going to be, as I was going to ask about what else could be prioritised.
The Minister for Social Care, Mental Wellbeing and Sport, Maree Todd, has spoken about
“the Scottish Government’s long-standing commitment to the principles of Fair Work, and more specifically, enhancing the experience of Scotland's social care workforce.”
We know that the social care workforce is skilled. When I visit local care organisations and speak to the staff, I hear that they are doing a lot—even more than their equivalent healthcare support workers would be doing in a secondary care setting. I would be interested to hear how further funding of fair work initiatives would help make improvements, and whether that should be focused nationally or locally.
Part of the remit of a consensual negotiating body—with all the stakeholders around the table, on an equal footing—would be to discuss where the money is best spent to have the best impact. For the past three years, the Scottish Government’s working group has been working on a tripartite model, with the unions, employers and the Scottish Government, as the funders, around the table. Those three parties would work on an equal footing to negotiate consensus on sustainable and meaningful settlements that would deliver fair work for social care workers. The remit would be beyond purely pay; it would also look at other aspects that should be focused on to deliver fair work.
11:00The legislation describes something that is a bit different, which is a tripartite body that would negotiate in the absence of the Scottish Government and would have the ability just to make recommendations. It is important that we do not lose sight of the fact that having all three parties around the table is important in ensuring that they are aligned on the priorities.
The working group’s model, which is the one that we propose, is also democratic, as each group would appoint its own members, and the chair would be appointed jointly by the group. The member organisations would consult and take notes from their members, and the body would set its own remit, agenda and priorities. That democratic power would mean that the parties in the negotiating body could take note of their members’ views, whether they were employers or workers, and understand what was important to them and what would have the best impact.
If it was enacted as written, the legislation would risk undermining some of that. Under the model that is described in the legislation, ministers would appoint members and the chair and would set the group’s remit and direct its priorities, which would be far less democratic. In our view, it is less likely that that approach would address the key issues in the sector, because the quality and strength of voice in the sector would not be represented.
Importantly, we have been developing a voluntary model. All three stakeholders would be there consensually, because of their commitment to a common purpose. As we set out, and as Karen Hedge has alluded to, that purpose is about having parity across the sector for workers, whether they are in the third sector, the independent sector or are working within the national health service or local government. All those parties would have parity of esteem and parity of value in the way that they would be treated.
The legislation as it is currently written describes stakeholders being put together by regulations for purposes that are set by ministers, so a common purpose would not come out of the collective agreement of the group; rather, the purpose would be set by ministers. To your point about addressing the broader fair work principles, we think that it is really important that any model that is put in place is truly collaborative, consensual, and voluntary, and that all parties, including the Scottish Government, the unions that are representing workers and member organisations that represent employers, participate on an equal footing.
I have been in my role for almost eight years. During that time, I have been involved in the discussions about fair work in social care with Scottish Government colleagues and yet, despite our discussions, the rate of pay for care workers in Scotland who work in the independent sector has dropped. To me, that shows that there is a requirement to put fair work principles on a stronger footing. Having only voluntary conversations will not make a difference. Care workers used to receive above the living wage, but they now receive the living wage, which is wholly unacceptable.
Clearly, the current financial circumstances are challenging, but care workers’ pay has consequences for staff retention and the other things that Lesley de Jager has already spoken about. In the interests of time, I will not repeat what she has said, but I will raise some of the things that have been discussed.
The fair work in social care group has three sub-groups: one on the mechanism for the payment of the uplift, another on terms and conditions, and a third on effective voice, which the conversation about the negotiation body would relate to. Funding relates specifically to the terms and conditions sub-group. Providers and those who work in the sector who are represented in that group have raised SSSC registration fees, access to better sick leave policies, better access to flexible working, and issues such as maternity and paternity pay. Work has been done to cost some of that and find out what it would mean for the sector, but, again, nothing was implemented, even though that group got to the end of that work, which evidences that we need something to put such work on a stronger footing, such as a negotiation body.
Your question started with funding, which I will address, and some of the answers moved on to the potential impact of agreeing the LCM based on the current arrangements that are being negotiated, so I will try as quickly as I can to deal with both of those issues.
On the funding, to be frank, it does not really matter whether you use UK legislation or Scottish procurement legislation, because, if the funding does not follow, it does not work. It does not matter whether you are talking about reserved UK legislation or devolved Scottish procurement legislation, if you ain’t got the cash, it is not going to get funded, Government is not going to be at the table and it is not going to work.
The second question that the discussion moved into was more about whether agreement to the LCM impacts the current architecture that is being negotiated. That is where there is a difference of opinion. My view is that Government always holds the trump card. In a sense, the Government can create—either through procurement legislation or other legislation—any negotiating machinery that it wants to, and every indication that we have is that the Government is committed to the tripartite, voluntary model that we have been talking about. The LCM confers on the Government the power to introduce that. Indeed, depending on the progress of the Care Reform (Scotland) Bill, it may already have introduced that before the Employment Rights Bill is passed.
The question is, what changes? Before the amendments that provoked the second LCM, our major concern was that the power of Scottish ministers was going to be limited, as the provisions of the UK act would apply in Scotland and Wales, too. That would have been a genuinely limiting factor and it would have failed to align the power of the Scottish ministers in relation to procurement and the delivery of social care with the conditions of the workers.
From our perspective, there is full commitment to the same process that we have heard about here, but we do not take the view that conferring on Scottish Government ministers the power to ensure that that happens diminishes that in any way.
The Employment Rights Bill is speeding through the UK Parliament. There was not really any broad consultation on it by the Scottish Government, owing to when it was introduced by the UK Government. Is the fact that it wasnae really consulted on widely in Scotland going to be an issue? Does that impact on devolved social care infrastructure, for instance? We have already started to talk about that.
Absolutely. The delivery of social care in Scotland has a local nature. The populations living in our urban areas and those living in our rural and remote areas require different things, particularly with regard to those staff in rural areas who work in home care and have to travel long distances. There is concern that, because the legislation is being pushed through at such a rate in Westminster, without consultation with those living, working and employing people in those conditions, there might be a lack of understanding of their needs and the way that services are commissioned and procured in Scotland.
We have a lot more collaborative working in the social care sector in Scotland than is the case down south, and there is a question about whether the legislation would allow for a model such as that used by the Granite Care Consortium, with care workers and care organisations sharing route planning and back-office functions. When legislation goes through Parliament, we need to ensure that it enables the system to continue to flow and flex to meet the needs of local people in Scotland. We need consultation to happen here, but we also need it to be done by Westminster, to take account of that.
On the financial aspect, we know that fair work requires fair commissioning and procurement. Work that has been done around the Care Reform (Scotland) Bill has looked specifically at fair commissioning, and the Scottish Government is now looking into fair procurement. Those issues will not sit within the bill, but the fact that the Scottish Government is taking that work forward is particularly important and will relate to whether the sector is able, in reality, to then pass on those fair work terms and conditions. Without cognisance of both settings, the bill could fail.
Okay. Thank you.
Good morning. What are the challenges for the adult social care sector in relation to establishing a national negotiating body? What are the implications and potential risks of the provision that is contained in the LCM?
The challenges in establishing a national negotiating body for the sector are in the fact that the sector is very disparate. There are lots of providers with lots of specialisms delivering lots of types of care and support. It is not homogeneous at all. There is a huge amount of variety in the sector. The challenge for us, as membership organisations, is to ensure that we adequately engage with providers across the sector in positioning where we want to move to and that we take views from different parts of the sector to make sure that our position in that negotiating body is well informed and reflective of our membership and the variation in it.
There are a number of risks. There are risks to our organisation as a membership body, including what the proposals mean for how we operate and the types of service that we deliver to our members. There are also risks in setting up a negotiating body altogether. One of those is around industrial action. I hope that we can learn from other sectors. For example, Colleges Scotland released the comprehensive Strathesk Resolutions report in 2022. The sector had experienced seven rounds of industrial action over the first 10 years of efforts to put in place a national negotiating body. We have looked to take into account a number of learnings from that report in the design of the body that we propose. A key reflection that I have taken away from that is that the design absolutely needs to be tripartite, with the Scottish Government sitting round the table.
The Strathesk Resolutions report states:
“A significant influence here seems to be the way that the threats and actuality of industrial action have been used to lever last-minute ministerial pressure to reach a settlement.
This has ultimately undermined the credibility of both negotiating teams, seriously disempowering the negotiating process itself. In consequence, a cycle of negative expectation has arisen that foresees a break down in pay negotiations as inevitable, followed by strike ballots, probable industrial action, and a settlement eventually reached with some form of intervention from SG.”
We do not want to end up with a similar situation in the social care sector, so we need to make sure that we take on board the learnings from that. The set-up for Scottish colleges was a bipartite arrangement, and they were not empowered to make those decisions, because the Scottish Government was not sitting round the table with them. Let us make sure that we do not make that mistake again. We have sought to take on board other recommendations, such as independent chairing of the negotiating body, in designing what sectoral bargaining could look like so that it operates successfully in social care.
I wish to raise the challenge that we have as a sector with low union membership. Given that situation, how do we enable the sector to have an effective voice? There is also a need to further explore the work that the Scottish Government has been doing in the fair work in social care group to enable that to happen. For instance, we have two very large employee-owned organisations in Scotland that have different mechanisms for ensuring an effective voice in that space. We know that some care workers are using food banks right now, so how do we make sure, using an effective voice, that the funding of their union membership is covered so that they can be members of unions should they choose to be?
That needs to be part of the negotiation. It is a bit of a chicken-and-egg scenario; we know that unionisation is likely to lead to care workers having better terms and conditions, but they cannot necessarily afford to do that in the here and now. That needs to be considered when we move to the proposed legislation.
On the back of what Lesley de Jager said about the tripartite model, last week I met the Welsh Cabinet Secretary for Health and Social Care and other members of the Welsh Government. They are also working on a tripartite model because they see that, based on the evidence that Lesley discussed, it is an effective mechanism.
11:15It is worth exploring why we are proposing that model. It is because, over the years, we have had discussions between commissioners, purchasers and providers but we have not been able to deliver on the ground—not everywhere, although there have been areas where we have been able to deliver. However, understanding how the money flows from one end of the system to the other requires the presence of the Scottish Government in that space.
Our organisations will need to build in mechanisms to canvass our members to make sure that they are represented effectively in the body. I know that the CCPS has been working towards that, and Scottish Care already has a mechanism for the national care home contract, which we would look to extend to cover our other members that deliver different forms of social care. So, I suppose that that is a note to the committee to say, “We’re on it.”
The original question was about what the difficulties are. They are manifest; added together, they are not as important as the shared goal of achieving the respect, consistency and security that care workers need, but they are manifest.
As we have talked about, two bargaining units are already established. There are enormous regional disparities. There are three models of delivery: private, third sector and direct. There are also definitional issues. There is a big lump of things to deal with. The point was made, so I will address it: we look forward to working with employers to increase trade union density in a sector in which it is quite hard to organise, because of its disparate nature. We are pleased to hear that the benefits of union membership and negotiating are recognised.
I return to the fact that the model that we are talking about—the one that is being developed—is the best way to do it. I remind the committee and everyone that there is a broad consensus on that. As far as we are concerned, there is nothing in this LCM that should prevent it from happening, and happening immediately. There is nothing in the process that should slow down the discussions that are taking place on the creation of a constitution for the negotiating body.
It was mentioned that services are delivered locally and, in many cases, as Karen Hedge said, in remote areas. Will there be any conflict with representation from union reps at the local level? Would they be missed out of negotiations and would it be difficult to bring that local element into negotiations?
One might look at other bargaining arrangements, even though, in many ways, they are different. The local government settlement is agreed by COSLA with the unions involved. However, there is a whole set of other negotiations that take place council by council so, for example, the terms and conditions in Dundee might look different in many ways from the terms and conditions in Edinburgh. They will be underpinned by certain things that are agreed as part of the national framework for agreement, but other things will continue to be negotiated by unions where they are present and staff representatives where they are not. Those would not be touched by a central collective bargaining agreement. The only question is what is in play and what is not.
From a trade union perspective and, I think, an employer perspective, a central agreement would not remove a range of other matters that are subject to local discussion and negotiation.
Several care providers already recognise trade unions and negotiate with them locally. Similarly, providers work closely together—for example, in Midlothian, they established a block contracting model for providers which enabled them to offer set hours for care workers. That had consequences of better staff retention and so on. It is an excellent model.
A national negotiation, however, would enable the minimum standard to be worked from, built on and flexed locally as and when required—it would not matter whether it was in a local area or specific to one organisation. In addition, and fundamentally to this process, the tripartite model—if it is that one—would hold all partners accountable for the flow of the funds.
The discussion is really helpful. The element of the barriers to trade unions is important, because there is no doubt that, in our regions, we come across employers who put up barriers to or bring up fears around care sector workers being active in the trade union movement, which is totally unacceptable. It is good to hear about that from witnesses such as you. We hope that people will approach us about anything that we can do to help.
My question relates to the agreement that seems to be in place but has not actually gone anywhere, which is frustrating. First, what are the barriers and what can our committee do to try to move that forward? Secondly, would getting the LCM through the Parliament nudge the agreement closer and allow us to get it done?
On the first part of the question, as far as I know, the barrier at the moment is the Scottish Government. I was part of the drafting group representing employers who have been developing the constitution for the proposed body. We have pretty much reached agreement on what it should look like, and it has gone in for ministerial review. It has been several months now and we have not had feedback on whether it has approval and whether we can move forward with it.
Reading between the lines, my understanding is that the introduction of potential legislation and the need to see how it flows through might have put the brakes on the process. I get the sense that the introduction of legislation has slowed down the progress. However, we do not need the legislation to be in place to get the process going—we only need ministerial approval. As employers and as unions, we are all ready to get round the table—we only need the Scottish Government to say, “Yes, we are going to get round the table with you and engage.”
I will be slightly cautious, because, as I am sure the committee knows, three unions are involved in those discussions. It is an on-going negotiation and I will not jump ahead of it, although I do not dissent from anything that I have heard in the previous contribution, if I can put it that way.
I could see why the period between the publishing of the bill—in particular, around November and December when it was involved in first reading—and the clarification on the powers of the ministers, which appeared in the amendments and is now subject to this second LCM, might have caused a problem, because you are potentially looking at a situation in which UK legislation would say, “You cannot do that any more.”
However, the proposed UK legislation, as tabled and now amended, does not say that. Therefore, any impediment that might have existed—I underline the word “might”, because I do not know—should not exist now, because the bill, which is overwhelmingly supported in the House of Commons and by the majority of the parties in the Scottish Parliament, looks likely to pass. If this LCM is passed, the Scottish Government has a clear trajectory and there should be no impediment to making progress. Were there to be further impediment, it sounds as if the responsibility would lie at the Scottish Government’s door.
COSLA’s submission says that COSLA would request that all directly employed local government employees in the sector be removed from the scope of any negotiation arrangements. How would that work in practice? Thinking about the parity of esteem and everything that has been sought, could removing local government employees working in social care from the negotiations work? What would be the consequences? I know that from COSLA’s perspective it is about the job-matching processes in local authority areas. Could we explore that a bit?
As I mentioned, we have been developing an underpin model. We are looking at the idea of setting minimum sets of terms and conditions across the sector. However, clearly, some parts of the sector—local government and agenda for change—already have collective bargaining on a national basis in place.
We debated long and hard about how those could or should interact. Where we landed was that the gap is so big that it is not an issue that we need to worry about now, but it could be in the future. We are aiming to close that parity gap between the public sector and workers across the rest of the sector.
We have proposed language that says that the negotiating bodies for agenda for change and for local government should pay due regard to what is happening in the sectoral bargaining arrangement when they go into their negotiations. That does not necessarily mean that they would be bound by it, but they should look across, ask what was agreed and say, “Let’s take that into account when we look at how that would impact on our bargaining arrangements.” They can sit alongside each other.
That raises concerns for me about the timeliness of the procedure. We already know how long it takes for agenda for change to settle, and that has implications, particularly for the care home providers who offer nursing, because it is difficult to calculate the pay differentials. You do it in advance, but it does not necessarily add up, so you set your budgets before you know how much you will be paying your staff. Given the financial constraints on the sector and the number of providers that have closed, even just this year, there are huge concerns about the viability of the sector. Whatever happens, we need to consider the timeliness and how organisations in the sector can be sustainable and viable on an on-going basis.
In relation to COSLA’s submission—I am sure that I have said this to the committee before—I wonder about how this relates to job evaluation. The work that a care worker does now is very different from what they did several years ago. The work is moving into the space of undertaking more tasks that were previously considered to be health-based tasks, and many more specialist tasks such as percutaneous endoscopic gastrostomy—PEG—feeding, the use of stomas and support for people who have advanced neurological conditions and dementia. The clinical sign-off aspect that is required now is much different from what it was even three years ago.
I wonder whether there is a requirement for local authorities to undertake job evaluations, which would significantly increase the pay, terms and conditions that care workers should be entitled to. That would throw things out of kilter and create fiscal challenge.
As Lesley de Jager said, there is already a significant gap between local authorities and the independent sector. Funding the closure of that gap poses big questions for the Government. We should remember that, if that care was not happening in care homes or in people’s homes, it would be happening in clinical settings, but we do not have the capacity to do it there, nor should people have to have it there when they could have it where they live.
That is helpful.
I associate myself with those comments, particularly Lesley de Jager’s point. The day that the outcomes of our negotiating body begin to put pressure on direct sector pay—we will deal with that problem when we come to it—will be a very happy day, to be quite honest.
11:30
I refer to my entry in the register of members’ interests. I am a practising NHS general practitioner, a current British Medical Association member and a former chair of the GP trainees committee.
At the moment, what is the difference between what a local authority pays itself for a care home resident compared to what it pays for a resident who is in a private care home?
I assume that you are asking about what it costs the local authority to deliver care, in comparison to what it would pay a private provider to deliver the equivalent care. At the moment, local authorities pay a care home just under £1,000 per week per resident. It costs three times that for a local authority to deliver the care, although we do not know for sure what the figures and statistics are. It would be helpful to have that information but, given how busy things are in social care, we have not put in a freedom of information request, in order to spare them that challenge.
Some local authorities, such as Ayrshire, have recently published information on their costs, as has NHS Highland. Recently, the Liberal Democrats prepared a report on Highland with more detail on local costs. We know that it costs in the region of three times as much for local authorities to deliver care, but it would be helpful to do more work in that space.
Let us just say that we are looking at around three times as much. Is it fair to say that we know that terms and conditions are better for staff who work in local authority care homes?
Pay and pension are both higher, so that is fair.
That comes with costs that are three times higher. We all agree that social care staff need better pay and terms and conditions, but if we were to create bargaining that would, I hope, at least create parity of esteem with local authorities, or possibly raise the overall standards, how would that be affordable without proper funding for the private care home sector?
Proper funding is required, hence the need for a tripartite model that would follow the funding from source to the execution. One of the great things about the independent care sector is that innovation happens and we can consider new models of care. It fosters entrepreneurship, which is what is required to ensure that we move at the pace that the social care sector requires if we are to deliver what people are looking for in this century when they access care and support.
The independent care sector offers the ability to flex as well as to make savings in other spaces and places. For instance, the uptake of new technology has been higher in the independent sector than in the statutory sector, which has enabled people to deliver more care and support and focus on the streamlining of back-office functions. That is how we can continue to offer greater savings in the sector.
When it comes to what we offer our staff, funding must be provided. At the moment, we know that the national care home contract does not offer funding lines for technology. For the sector to be able to adopt and use technology, the funding has to come from those who are paying privately, not from Government-funded residents. There is a huge need to open the conversation around that can of worms.
To clarify what you have just said, are residents who are paying privately to be in a care home subsidising statutory local authority patients?
That could well be the case. The model of care is currently based on the national care home contract cost model, which does not include funding lines relating to all the care and support that is delivered for people who are living in care homes. That suggests that there is a gap between Government funding and what care homes are required to deliver, including technology as well as meeting building guidelines and requirements from the Care Inspectorate, along with the changes that have been made post-Covid on infection prevention and control measures—there is a list of 18 things. I am sorry; I cannot remember them all, but I can get them to you if you would like them.
If you could, that would be wonderful.
Yes, of course.
I want to open up the questioning. In a scenario in which money is very tight—which is where we are right now; local authorities are consistently saying that they have no money—if more money is not given to care homes in the independent sector, how can there realistically be a significant improvement in pay and conditions? How can that happen if we do not level up what a local authority pays the independent sector compared to what it pays itself?
There are two points to make there. First, I do not have the figures to hand, but I would suggest having a little caution. I think that Karen Hedge implicitly accepted that point when she assumed a ratio of 3:1 between the costs for direct public provision and those for private provision. It would be quite a feat to achieve that while also paying shareholder profits, including for people who live in tax havens. So, I am not sure that I accept the premise.
Forgive me, but if shareholder profits did not exist—and even if a local authority paid itself only twice as much as the independent sector—would there still be enough money? If we took away every single penny of profit, would there really still be enough money for the independent sector to pay people the same as local authorities do?
You are inviting me to make my second point, which is that, whatever the nature of provision, more money needs to be put in the system. That is a matter of absolute unity between us.
The premise that I do not accept is that money being tight is the answer to the question. Money is tight because we choose that money will be tight in this area rather than in another; we choose to raise a little bit less in tax than we might to give dignity to patients and workers.
My point is less about the comparison being made and more about the fact that the system needs to be adequately funded, whatever the model of provision, to provide decent levels of care and decent pay in the system. I think that that is a point of absolute unity among the three of us.
On the back of what Dave Moxham has said, I will forward to the committee a copy of our “Myth Busting Compassion in Crisis” report, which was published last week and provides updated figures on the amount of profit that the care sector has made. The profit is less than half of what a bank thinks that it should make to be financially viable. We also have to consider that those funds must be reinvested into the care homes, the capital infrastructure and training and development for staff. The reality is somewhat different for Government-funded residents than the picture that Dave Moxham has painted, so I am happy to share that report.
I should say that the report’s contents are taken from other reports by independent organisations; we have just put all the information into one place to make it easy to read. It is not information that Scottish Care has put out—it is information from other organisations.
I have a final question. What has been the impact of the national insurance rise?
It has been pretty catastrophic.
It is devastating.
“Devastating” and “catastrophic” are the two words that I would use to describe the impact that it has had on our members. The latest estimate is that there will be £34 million of additional costs for the non-profit sector. Local authorities are telling our members that there will be no increase in payments to fund the national insurance increase, and, as a result, our members are being sent in to have what are very difficult conversations with their boards. They are projecting loss-making years ahead as well as major deficits, and they are having to use reserves just to keep the wheels turning and to keep providing care and support to the people we support. It is an extremely worrying time for providers, who are worried every day about how they will keep the lights on and keep providing the care and support to the people who so desperately need it and who are some of the most vulnerable people in our society.
We recognise the figures that have been published by the cabinet secretary on the impact of the rise on the Scottish public sector and the degree to which that has been compensated through the Barnett formula mechanism. It looks to us that, across the whole public sector, there will be a shortfall of around £300 million. Therefore, the figures that Lesley de Jager has put forward seem accurate.
For the independent sector, which incorporates the not-for-profit sector, the shortfall figure is sitting at around £84 million. This financial year, we have already seen a number of small care homes intimating that they might close. That poses a real risk to the local community, with people now having to move two hours away from their home, their family and the community that they grew up and worked in. The impact on the sector is absolutely huge, and I am incredibly worried about what is going to happen.
I will say that the Scottish Government has responded incredibly positively and has stepped up with a viability group, which meets every week with Scottish Care and COSLA to look at mitigating factors for some of those risks. We will push things as far down the road as possible, but, given that we are already seeing closures, the reality is that we will see a tendency to move from smaller care providers to larger ones.
What we are seeing for our home care providers is a change in the eligibility criteria in local areas, which is resulting in fewer people being able to access Government-funded care and support. It means that there are fewer commissioned hours from care providers. It is difficult for people to see the impact of that. People can see the impact of the closure of a care home on a community, but they do not necessarily see the same when it comes to home care providers. What happens is that a home care provider delivers less care and support, and what that means on the ground is that they are hiring fewer people. The impact is hidden to a certain extent, but the reality is that fewer people get a service and fewer people have employment in the local area.
On the issue that we are here to talk about today, which is the terms and conditions for workers in the social care sector, the ability of providers to give any kind of meaningful pay increase or to improve terms and conditions for people has been completely obliterated or, at least, severely challenged by the increased costs. In fact, the first industrial action in social care in 10 years is to take place in a couple of weeks.
Good morning. I thank the witnesses for their evidence so far, which is painting a picture of quite a disparate social care sector. One thing that they have talked about is the lack of parity of esteem between public and private social care, which is growing. As the independent sector has limited control over costs and how it can deliver social care, it does not have the same potential to flex that local government has. Following on from my colleague Sandesh Gulhane’s questions, I wonder how the national negotiating body might affect or impact commissioning or procurement decisions.
That, fundamentally, is why we need a tripartite model—to make sure that there is an understanding of the flow of the funds and resources that are required to enact and enable whatever is negotiated within that body. We need to remember that new models of care and support, which would actively go a long way towards freeing up some of the barriers in those local areas, could be part of that conversation, too. At the moment, decisions are made but it is sometimes difficult to see the funds coming through at a local level, and that is what a tripartite model would enable in that space.
I have, to one extent or another, been involved in this discussion for around 20 years, and it has always been understood that it is not only the quantum but the models of commissioning that matter. One of the factors in that respect is potential security and certainty for those delivering the services; even if some of the factors do not fall within the immediate terms of reference of the negotiating body, they are nevertheless bound to be conditioning factors. For example, if I were a voluntary sector provider, or a representative thereof, I might want to say how much more easily it would be for me to deliver X or Y, based on the fact that I had more certainty in my funding stream. There is an undeniable interrelationship between models of commissioning and the ability to reach agreements on a national level, and that is bound to be part of the conversation.
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Perhaps I can develop that slightly. In any negotiation—and I think that we all agree that the terms and conditions of our care sector need significant improvement—there are going to be cost implications for the private and independent sectors. If there is no further investment, there will be more closures in the independent sector. Can you explain the impact that that will have on the sector as a whole?
You are absolutely right—if money does not come in to cover the costs, there will be closures. The same would happen if I went to the supermarket and paid less for a loaf of bread than it cost the supermarket to provide it. Such a situation would no longer be sustainable and, at some point, providers would close down.
Other risks are that some of the staff become self-employed, which is more likely to happen in home care. There are questions about the legality of that, as it would remove people’s access to employee rights, with adverse effects that would be the opposite of what we are trying to achieve through the negotiation. There are two routes down which that could go: either they would find a different way to pay staff less or they would offer less in their terms and conditions.
We need to get a handle on that to enable sustainability. If we do not have access to the right terms and conditions and pay for our staff, and if they get less, we will see what we are seeing at the moment—a very transient workforce. It makes it difficult to hold on to our workforce and it means that people leave the sector to undertake other roles. I have nothing against hospitality, but people working in that sector are currently receiving the same rate of pay as those working in the social care sector, and you get tips if you work in hospitality. It brings into question how we, as a country, value people who require access to care and support, if we value that sector more.
As I have said, if a care home closes, it might mean people having to travel for up to two hours to visit their loved ones. One of my colleagues, who has just joined our board, told us that one of the residents in her care home is the librarian who helped her when she was a kid, and one of them is one of her teachers from school. We would lose the community connection and the ability to give back to the elders who were there for us in our younger years. That community relationship and sense of community would be lost, and that would be a failure for Scotland.
We are running over time, so it would be appreciated if you could keep your questions brief.
I will not ask my next question, then.
Okay—thank you. If the panel could be succinct in their responses, too, I would be very grateful.
Good morning, panel. I will try to stick some of my questions together, given that we are running short of time.
Should any national negotiating body include staff who work in children’s social care services? Also, given the number of professionals in that area, how easy is it to define and understand that workforce? If you feel that they should be involved in that body, how do we approach their potential inclusion to ensure that they have a meaningful voice?
I am going to keep taking this back to the LCM and the legislation, instead of speaking more generally.
There is a strong case for that power to be devolved to the Scottish Government. What form any consequent negotiating body, or offshoot of that, might take, it would take too long to say and I might not be the right qualified person to do it.
However, what you have suggested makes sense, given that, at the moment, child social care pay rates flow from adult social care pay rates—or at least the minimums do. The average council will say, “This is what has been decided as a minimum for adult social care—we will apply that to children’s care.” Clearly, there is some form of interrelationship there, so there is something to deal with. There is a case to be made for child social care to follow the same route as adult social care, but we do not have time—and I might not have the expertise—to say exactly what that should look like.
Thank you. Do any other witnesses want to come in?
Our members have made it very clear that a national body must include the ability to negotiate for workers in the children’s sector, too. There is no clear delineation, particularly in the third sector, between providers who provide support and care to adults and those who provide support and care to children—indeed, many organisations do both. People do not suddenly turn from being a child into an adult overnight; there is a difficult transition, particularly for people who are vulnerable, and to carve out a distinct policy sector and say that it will be treated differently does not take cognisance of the fact that these are human beings who are moving through different stages of their lives. We need to ensure that equal provision is in place, whether staff are supporting someone who is 17 or someone having their 18th birthday.
Our members provide care to adults only, so I will abstain from giving detail. However, with reference to challenging transition periods, not only is there one in the transition between children and adult services, but there is a similar challenge at about the age of 65, when there is a significant drop in the funding available to individuals.
Do you have any further questions, Gillian?
No, thank you. I am all good.
Thank you for being so succinct.
I have another question about the social care workforce and last week’s announcement from Westminster about the immigration cuts in relation to social care workers. Lesley de Jager talked earlier about a shortage of workers being one of the most challenging things for the workforce in a key sector. Do the witnesses have any final comments on that?
It is another blow to the sector from Westminster. I would also reflect that Scotland is already a bit more progressive in social care than England is. It is not perfect—indeed, it is far from perfect—but at least it is aspirational. The language that we are hearing from the Scottish Government is much more supportive of the sector than the quite shocking rhetoric and language that we have been hearing from the UK Government, and we were pleased to hear the minister rebut such rhetoric when she spoke on the matter a few days ago.
I urge us to think more aspirationally and progressively instead of saying the things that Westminster is saying. We can make a change in spite of UK Labour legislation, not because of it or thanks to it. We have a way forward; we do not need to rely on what the UK Government is doing and, actually, Scottish people deserve better than what the UK Government is putting in place for us. The change to immigration legislation is another blow to what is an already very stretched sector.
As a matter of principle, I refuse to combine anything that I say about migration with anything about the labour force or anything on economistic grounds. I remind people of the enormous contribution that migrants make to our wider cultural wellbeing.
However, if we are talking about the direct impact on the sector, I think that it will be very grave. Arguably, it could be even more grave in Scotland, because—and this brings me back to the point about the labour market—there is a generalised case to be made for migration in Scotland that might not prevail in the same way across the UK. That underlines our view that migration powers should be devolved to Scotland so that we can meet our particular cultural and labour market needs.
Scottish Care will be releasing the results of the report that we have produced on the back of the response to the immigration challenges and the announcements by the Westminster Government. We can send the committee a copy of the report tomorrow, once it is available. In fact, I understand that there will be a meeting this afternoon with the First Minister on the report, an embargoed copy of which the Government is receiving. If I were to tell you that we made the survey available, I think, late last Thursday—or maybe Friday morning—and that, by yesterday evening, more than half our members had responded to it, it might show the evidence of the feeling from the sector.
At the time of the Brexit negotiations, we were involved in discussions about a devolved set of responsibilities for immigration for Scotland. Our position on that has not really changed. The requirements for Scotland are often different, particularly for care homes. We find that one member of a family will move here to work in a care home, and they will then bring other members of their family, who will work in that care home, too. For that reason, changes to current visas will affect not just an individual; we will see whole families being uprooted from communities, and it will have a huge impact.
On that particular point, have we, through immigration, been using cheap labour just to keep costs down? That is my only caveat about continuing to have such immigration—that the pay level is sustained.
That is a very good question, and it is good to be able to respond to it; it is the benefit of the work that we have been doing with the fair work in social care group. We have a commitment to pay the living wage, and it applies to all social care staff. I will still say that the pay is not enough, and that is the case for all social care staff, regardless of where they are from. However, the commitment that everyone is paid equally remains.
I recognise the economic reality that lies behind what you have described. Indeed, we have always argued that increased powers for Scotland over migration go hand in hand with increased powers over employment, regulation and the mechanisms that we are talking about, because of the risk that is being highlighted. The truth is that the negotiating position of a completely decimated social care workforce might increase as a consequence of a labour market crisis, but that is not something that any reasonable person would want to happen, given the need to care for so many people in society.
I thank the witnesses for their attendance and their evidence, which has been very helpful to the committee’s scrutiny of the LCM. The committee will just continue with its work, but the witnesses should feel free to leave, if they wish to do so.