Sir Keir Starmer, leader of the Labor Party, is committed to a fair pay deal in the social care sector. Photo: Ian Forsyth/Getty Images
Labour's plans to give unions greater powers to negotiate social workers' pay will cost billions of pounds, The Telegraph reports, raising questions about where the money will come from.
Sir Keir Starmer, leader of the Labor Party, is seeking a fair pay deal for the sector that would see government-backed collective bargaining between unions and social care providers.
Senior Labor Party figures say the policy will increase pay for welfare staff and reduce reliance on foreign workers on visas to make up huge shortfalls. If it proves successful, those working on the policy say it could be expanded to other sectors.
Labor has not promised any additional funding for the collective bargaining plan and it is understood there will be no plans to announce the costs ahead of the election, despite promises of a “fully funded” manifesto.
However, The Telegraph can reveal that Labour's shadow ministers, social care providers and think tank experts say the policy will require significant new government spending.
Councils pay for most of the country's social care, meaning higher wages for workers will lead to that more taxpayer money will be spent on providing services.
Ben Zaranko, senior research economist at the Institute for Fiscal Studies think tank, estimates that a pound-per-hour increase in frontline care workers' pay would cost the Treasury an extra £1-1.5 billion a year.< /p>
Mr Zaranko said: “Another couple of pounds an hour within a couple of years seems entirely possible. It could cost three, four, five billion pounds. This is quite possible.”
For years, local authorities have complained that they are not given enough money from central government to provide adequate social care for adults.
Nadra Ahmed, who heads the National Care Association, which represents more than 1,000 small and medium-sized health care providers, said more central funding would be needed. She said: “Negotiations with unions will likely only lead to higher wages.”
Ms Ahmed made it clear she supported higher pay for care workers, but said Labor had to agree to more funding. will be needed, adding: “We can promise everything to the Earth. It's about deliverability.”
Sir Keir has come under pressure to give more details on how he will pay for Labour's policies and backtracked on his flagship green pledge after admitting spending £28bn a year on energy and infrastructure projects was beyond their means.
The party leadership's failure to publicly acknowledge that their wage negotiation plan would actually require significant additional funding has caused alarm among some Labor shadow ministers.
There is concern that the current position of not detailing the implications of funding cannot be sustained until after the election. A left-wing think tank source said there was “concern” about the issue.
An ally of Rachel Reeves, Labour's shadow chancellor, denied that funding for social care policies was a point of contention during recent discussions on the party's election manifesto.
Labour sources close to the policy argued that it would be impossible to announce a specific funding amount before the election because the cost would depend on how negotiations end.
They also said Tony Blair and Gordon Brown failed to name the cost of introducing a public sector minimum wage before the 1997 general election, making a similar argument.
The policy is championed by Angela Rayner. , the shadow deputy prime minister, and is part of the New Deal for Work, which was developed jointly with trade unions. Wes Streeting, the shadow health secretary, also supports the plans.
The New Deal includes a number of measures that unions have long sought, such as strengthening their right to strike and banning contracts with zero hours.
The introduction of state-backed collective bargaining is seen in Labor circles as a clear step forward. a reversal from decades of declining trade union influence under the Tories and New Labour.
Labor leaders working on the policy see the social care sector plan as a test case, with the potential to expand to other sectors if it proves successful. Adult social care is considered a priority due to the difficulty of attracting enough workers to fill vacancies as the population ages, with about one in 10 jobs available.
Although full details of how the policy will apply to England only – whether or not it will work – have yet to be announced, unions representing care workers and social care providers will meet in a formal setting to discuss pay, conditions, timing and training.
Depending on this, different salary ranges may be established. by training level, with employers legally required to pay agreed wages according to those working on the plans. A consultation on the plans is likely to be published after Labour's election victory.
Justin Madders, Labour's shadow minister for employment rights and protection, said: 'There is a recruitment and retention crisis in adult social care is a key driver of the crisis currently facing our NHS and the situation will only get worse unless action is taken to fix this broken sector.
“A deal for fair pay in the sector will help end the race to the bottom of adult social care.”
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