Social care workers in Wales to receive real living wage increase as ‘challenging’ budget set to be revealed

The Welsh Government will publish its draft Budget later today, including funding to ensure social care workers continue to receive the real living wage.

Finance Minister Rebecca Evans will announce recurrent funding of around £70m to deliver the commitment, as part of a Budget that the government says will prioritise the protection of frontline public services.

Business rates relief will also be increased from 50% to 75% to match the support recently introduced in England to provide “certainty” to businesses.

However, she said that the overall budget would take place within a “challenging economic and fiscal context”.

Last night, talks with unions to avoid a nurses’ strike collapsed with the Welsh Government saying they needed more money from the UK Government.

Local authorities and health boards across Wales will be provided with the estimated £70m so that they can implement the real living wage uplift – to £10.90 an hour – with workers feeling the benefit by June 2023.

The real living wage is independently calculated by the Resolution Foundation and overseen by the Living Wage Commission.

The uplift will apply to registered workers in care homes and domiciliary care, in both adults and children’s services. It will also include personal assistants who provide care and support which is funded through a direct payment.

Frontline services

Minister for Finance and Local Government Rebecca Evans said: “Despite the challenging economic and fiscal context, we remain fully committed to doing all we can to protect the frontline public services that people rely on.

“I am pleased to be able to maintain our commitment to social care workers, and I will be saying more about how we will protect public services when I announce the full details of the Budget later today.”

Deputy Minister for Social Services, Julie Morgan added: “We were proud to be able to provide additional funding in last year’s budget to give social care staff across Wales a much-need pay rise. This further uplift will help to support recruitment and retention.

“Social care continues to face considerable pressure. We are doing all we can to work towards improving employment terms and conditions for the sector.”

Costly

Chancellor Jeremy Hunt announced last month that the Welsh Government was to receive £1.2 billion in extra funding as part of a package of measures to stabilise the economy.

The Welsh Government’s budget is now understood to be worth around £3 billion less in real terms than when it was set after the October 2021 spending review.

Other pressures include the increasing cost of social care, homelessness provisions, and public transport which has become more costly due to there being lower demand.

The number of households in financial difficulty and therefore in need of emergency payments has also increased, the government said.

Wales Fiscal Analysis (WFA), a research body within Cardiff University’s Wales Governance Centre, calculates potential losses due to inflation, even after additional funding, at more than £800 million in 2023-24 and £600 million in 2024-25.

The WFA has suggested that if the Welsh Government used devolved income tax powers to increase rates of income tax by 1p it could increase its budget by 1.4% next year and the year after.

‘Pass the buck’

Tory shadow finance minister Peter Fox MS said the extra funding announced in the UK Government’s autumn statement should provide Labour with the opportunity to “fix the structural issues in Wales, from reducing Wales’s record waiting lists, to properly funding our education system, to unlocking the Welsh economy”.

“Labour may try to cry helplessness and pass the buck, but they possess the financial levers and have the decision-making powers,” he added.

The Tories said they welcomed the announcement on business rates but said help needed to be more focused on energy-intensive industries.

‘Work together’

The budget will be announced as nursing strikes are set to go ahead in Wales after last-minute talks to resolve the dispute over pay collapsed.

The Welsh Government and a number of unions – including the Royal College of Nursing (RCN) – met on Monday afternoon, but failed to reach an agreement.

In July, following the recommendation of the NHS pay review body, a flat pay increase of £1,400 was announced for nurses, cleaners, porters, healthcare support workers and healthcare professionals, on most Agenda for Change pay bands.

However, unions have repeatedly argued that the pay rise, which is as much as 10.8% for those in the lowest paid roles, was not enough.

The RCN claim the pay award still leaves workers £1,000 worse off in real terms compared with 10 years ago.

RCN Wales director Helen Whyley accused the government of being “reckless” with patient safety and of calling a meeting despite them having “no intention of coming to a resolution”.

Ms Whyley said: “Low pay is fanning the flames of a workforce crisis and the rising number of registered nurse vacancies is already putting patients at risk.

“The pressure means nurses are caught between their responsibilities to their patients, their families, and their own health.

“If the Welsh Government is serious about patient safety, they must act now. Nursing staff must be paid fairly for the safety critical work they do.”

A Welsh Government spokesperson said: “We recognise the difficult position of those who work in the NHS in Wales and the strength of feeling. However, without additional funding from the UK Government we are not able to make an increased pay offer without risking a reduction in services.

“Whilst we were unable to avert the forthcoming industrial action, all partners have agreed to keep talking and to continue to work together on key issues.”