England

Section 5 of the Care Act 2014 requires local authorities to promote the efficient and effective operation of a market in services for meeting care and support needs.  In so doing, local authorities must have regard, in accordance with section 5(2)(f), for the importance of ‘fostering a workforce whose members are able to ensure the delivery of high quality services (because, for example, they have relevant skills and appropriate working conditions)’.

The meaning of appropriate working conditions is not elaborated in the statute and we therefore rely on guidance from the Department of Health and Social Care to aid interpretation.

According to Dept of Health and Social Care Guidance, when commissioning services, local authorities should assure themselves and have evidence that service providers deliver services through staff who are paid enough ‘so as to retain an effective workforce’ (our emphasis). Wages must be at least as much as the amount that must be paid according to minimum wage law.  The Guidance is clear that the need for assurance and evidence includes assurance and evidence about appropriate pay for time spent travelling between appointments.

Guidance states that when commissioning services, local authorities should assure themselves and have evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide the delivery of the agreed care packages with agreed quality of care.  This should promote and support the wellbeing of people who receive care and support, and allow for the service provider to meet statutory obligations to pay at least the national minimum wage and provide effective training and development of staff.  It should allow retention of staff commensurate with delivering services to the agreed quality, and encourage innovation and improvement.  Local authorities should have regard to guidance on minimum fee levels necessary to provide this assurance, taking account of the local economic environment. The guidance directs local authorities to tools on minimum fee levels provided by employer’s association, the UK Home Care Association, market data analysist Laing and Buisson and the representative body for directors of adult social services in England ADASS.

Section 4.103 of the Care Act Guidance addresses circumstances in which a local authority is aware that a provider has ‘previously’ been in breach of national minimum wage legislation. Accordingly, ‘a local authority should consider every legal means of excluding them from the tendering process unless they have evidence that the provider’s policies and practice have changed to ensure permanent compliance’. The use of the word ‘breach’ suggests more than a local authority being aware of complaints of non-compliance and it would be reasonable to expect it anticipates a local authority being aware of enforcement action having been taken by HMRC.

Paragraph 11.25 – 11.28 of the Care Act Guidance deal with issues of whether direct payments are of an amount which is ‘sufficient’ and relate to the payment of wages for personal assistants (care and support workers who are directly employed by individuals in receipt of direct payments). The Guidance provides an example in which a direct payment calculated so that a direct payment holder is able to employ a personal assistant at an hourly wage which is above the living wage (in the example, £9 an hour).  This is in contrast to the expectation detailed above that local authorities should fund registered providers at a rate that should allow payment of workers at least minimum wage.

At paragraph 12.49 the Guidance explains that a principle of proportionality is to be applied by local authorities when deciding whether to check if minimum wage and other employment duties are being complied with by a direct payment holder.  If a local authority finds non-compliance by a direct-payment holder or finds that they are failing to meet their obligations as an employer generally, the direct payment should be reviewed with the option of it being withdrawn or another option by which the individual is no longer acting as a direct employer.