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Charities count cost of 'living wage' pay rises

We investigate the 'huge consequences' of meeting the Chancellor's salary pledge

November 12, 2015 11:36
Jewish Care needs to keep attracting the best staff in a more competitive market

By

Barry Toberman,

Barry Toberman

4 min read

George Osborne's headline-grabbing Budget commitment to a substantially increased national living wage caught charity bosses on the hop. Four months on, Jewish Care chief executive, Simon Morris, can put a price on it in his charity's terms - and it is a high one.

The living wage replaces the current minimum wage of £6.50 an hour for over-25s. It will rise to £7.20 from next April and to at least £9 from 2020. The impact will be significant for welfare charities, particularly those providing residential care for the elderly, which are already feeling the pinch following reduced local authority contributions.

Having last year awarded a nine per cent salary rise to the lowest paid 17 per cent of its workforce, Mr Morris estimates that meeting the £7.20 minimum from April 2016 will be a manageable £150,000. It will be a different story in 2020, given that half its 1,400 employees currently earn below £9 an hour. His estimate is that the charity will have to find at least £2 million annually to meet the extra staffing costs.

Those on the lowest wage scale include domestic, cleaning, kitchen and laundry staff. "But by 2020 it's impacting on care staff - and we are talking front-line care staff," he points out. "A care worker in a home, a home care worker, a member of staff in one of our dementia day centres, a member of staff in the Sobell day centre [Golders Green] - the bulk of our staff who do the care."