Learning disability charities have expressed disappointment after the government announced that it will delay its decision on how to manage an estimated £400m back-pay bill for the sector.
HMRC suspended its enforcement of demands for learning disability charities to back-pay overnight workers the national minimum wage in July while the government has held talks with the sector on whether to continue demanding payment.
This pause in enforcement was due to finish on 2 October but the government yesterday announced it would extend this for another month as talks continue.
Its statement reads: “Today’s announcement will allow the government to establish how providers’ back pay bills will affect vulnerable people’s care. The evidence base will also ensure any intervention is proportionate and necessary and could be required to satisfy EU State aid rules on government funding for private organisations.
“During this temporary pause, the government will develop a new enforcement scheme for the sector to encourage and support social care providers to identify back pay owed to their staff. This will help to minimise the impact of future minimum wage enforcement in the sector while seeking to ensure workers receive the arrears they are owed.”
'Deeply disappointing'
In response to the announcement, learning disability charities expressed disappointment that an agreement had not been reached by the initial deadline.
Royal Mencap Society chairman Derek Lewis said: “It is deeply disappointing that, after many months of review and consideration, the government is still not able to announce any decision on the provision of support for care providers faced with a £400m back pay liability as a result of changes in government guidance on payments for sleep-ins.
“The further delay will mean that people with a learning disability, their families and carers are subjected to yet more uncertainty and anxiety, while providers will be forced to delay essential investment, and local authorities will struggle to persuade providers to take on new contracts.”
The Voluntary Organisations Disability Group chair Steve Scown said: “The decision to pause is worrying as for each month that goes by providers are continuing to work with a potential unknown back pay bill with no clear indication about future funding arrangements.”
“We call on government to step up the pace. We need a common sense pragmatic solution that enables colleagues to be paid their dues without employers being made bankrupt.”
The bill stems from a government decision to change payment terms for care workers who slept at the houses of clients. The rules now say that "sleep-in" workers are due minimum wage for the whole time they are at their place of work, even if asleep.
While this may create problems for charities in the future, the more immediate issue is the threat of workers claiming six-years' worth of back-pay on the new terms.
These penalties were estimated by Cordis Bright to be worth up to £400m and charities such as Mencap have warned that this could cause closure of hundreds of care homes and redundancy for thousands of workers.
But the Department of Health has commissioned Deloitte to undergo its own assessment of the estimated impact of HMRC’s demands on the sector.
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