Rising Staff Costs and Shrinking Budgets – Delivering the Impossible?

We are helping many providers try and argue that their staff are working unmeasured time and therefore that their arrangements on paying a flat fee for the shift are compliant with Minimum Wage legislation. However,  there are difficulties in structuring their arrangements in the best way to rely on that argument and no guarantee that a Court or Tribunal will accept that the shift is not time work. 

Hot on the heels of those cases came the realisation that some providers haven’t properly been implementing the complex regulations governing the calculation of holiday pay, by failing to account for shift premiums in holiday pay calculations and even more concerning a line of cases suggesting that  overtime payments may also need to be included in the calculation of holiday pay.

At the same time as wrestling with these potentially significant liabilities Commissioners are knocking at your door and asking you to deliver the same service at significantly reduced costs and staff are telling you they can’t go another year without a pay rise. This could be enough to send some providers over the edge and it is clear there will be some hard decisions to make. 

Here are some thoughts as to what you could be doing:

• Ensure you have a clear handle on your operational costs for all of the services you operate.  If there are services where you aren’t currently generating sufficient revenue look to exit the contract or partner with/merge with another provider to achieve greater economies of scale;
• Review your delivery model and consider how far technology can replace the need for waking nights or sleep in shifts  whilst still enabling you to deliver high quality care;
• Keep a close eye on what other providers are doing to take advantage of providers leaving particular areas or seeking opportunities to collaborate;
• Where you have staff on TUPE terms that are more expensive than your standard terms consider making changes to terms in light of the cost pressures on you;
• Review your approach to sleep ins and where you decide that you need to continue to provide sleep in cover, if possible structure your arrangements to try and argue that the work is unmeasured work;
• Negotiate with Commissioners when they seek to impose reductions in price. Check the contractual terms and resist the reduction if the Commissioner doesn’t have the contractual power to make the change. 
• Highlight the actual cost of delivering care in light of the latest employment tribunal decisions and their legal obligation to consider the actual cost of care;
• Look again at your procurement practices and identify ways where you can secure better terms and service from your suppliers;
• Reduce agency costs through growing your own staffing bank that can be accessed and managed centrally.

There is not going to be a one size fits all solution to meet the challenges ahead. Providers are going to need to review their costs across their organisation and it will be those providers that are flexible and are able to strategically plan and implement a wide program of change in practices across their organisations that will thrive.

Contact Matthew Wort on 0121 214 3501 or matthew.wort@anthonycollins.com.

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