Hidden cost of Labour’s social care plans laid bare as experts warn of funding gap worth BILLIONS

Hidden cost of Labour’s social care plans laid bare as experts warn of funding gap worth BILLIONS

Labour Party Chair Anneliese Dodds MP speaks to GB News Breakfast

GB NEWS
Millie Cooke

By Millie Cooke


Published: 08/04/2024

- 09:28

Despite pledging a 'fully funded manifesto', Labour has so far failed to guarantee any extra funding for the plan

Labour's plan for social care, which involves handing unions stronger powers to negotiate pay, could cost billions of pounds, despite no money being put towards the policy.

Sir Keir Starmer has committed to having a fair pay agreement in the social care sector, something which would be achieved through collective bargaining between trade unions and social care providers.


It is hoped the policy would boost pay and, as a result, decrease reliance on foreign workers to fill gaps.

But, despite pledging a "fully funded manifesto", Labour has so far failed to guarantee any extra funding for the plan.

Starmer

Despite pledging a 'fully funded manifesto', Labour has so far failed to guarantee any extra funding for the plan

PA

Ben Zaranko, a senior research economist at the Institute for Fiscal Studies (IFS) claimed that an increase of a pound per hour on frontline care worker salaries would cost the Treasury between £1 billion to £1.5 billion a year in extra funding.

He told the Telegraph: "A couple of pounds an hour more within a couple of years feels completely conceivable.

"That could be a cost of three, four, five billion pounds. That feels like a real possibility."

Meanwhile, Nadra Ahmed, chair of the National Care Association, said more central funding would be needed.

She warned: “Talks with the unions are only likely to lead to an increase in wages.”

While she told the Telegraph she is in full support of higher pay for care workers, she urged Labour to accept that more funding will be required.

She added: "We can all promise the Earth. It is about deliverability."

But Labour's shadow minister for employment rights and protections, Justin Madders, said: "The recruitment and retention crisis in adult social care is a key driver of the crisis currently facing our NHS, and this is only set to get worse unless action is taken to fix this broken sector.

“A fair pay agreement for the sector will help to end the race to the bottom in adult social care.”

\u200bAngela Rayner

Angela Rayner last year pledged a "cast iron commitment" to push through an employment rights bill within 100 days of entering office if the party wins the next election

PA

The policy is part of Labour's New Deal for Working People, with Angela Rayner last year pledging a "cast iron commitment" to push through an employment rights bill within 100 days of entering office if the party wins the next election.

The agreement would include protections against unfair dismissal, a ban on zero-hour contracts, more flexible working and an end to fire and rehire.

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