Social care appeals to Charity Commission

On 18 June, an alliance of five national umbrella organisations, representing hundreds of charitable social care providers, has written to the Charity Commission for help in resolving the sleep-in crisis. The Solve Sleep-ins Alliance, comprising the Association for Real Change, Care England, Learning Disability England, Learning Disability Voices, and VODG, is a partnership whose membership together covers the whole of England; we should take their concerns very seriously. OACP wholly supports their action.

The sleep-in issue has arisen due to a combination of the introduction of the minimum wage and the decision by HMRC to apply this to all time-work situations (employment where the employee cannot leave their place of employent, even if they are on stand-by, or in another role that does not require full attention). Sleep-ins, which were previously covered by a flat-rate fee, and where the employee was often undisturbed duing the night, suddenly became liable for an hourly rate which, averaged across their pay period (a shift or working week) should not contravene minumum wage requirements. It’s a complex issue, not least because of the wider impact on wage rates for other parts of an employee’s shifts (why should people get paid more when they are asleep?).

The additional funding for this increased liability was not provided for by central government, and in most areas was not funded by local councils either – Oxfordshire went part way, but many councils have failed to act. And in the last couple of years, HMRC has systematically worked its way around the sector enforcing the rules as they saw them. A moratorium last summer coupled with an offer for organisations to join HMRC’s Social Care Compliance Scheme means that every organisation that has provided sleep-ins over the past six years is on a knife-edge. And if we add in the potential liabilities of direct payment holders, we may see disabled individuals going bankrupt, as well as organisations going into administration. Putting aside the well-documented woes of social care generally, this would be truly catastrophic. So far the Government has failed to act – should we assume they don’t care?

Whatever the inner workings happening within government, it’s a mess. And the delay from Government coupled with legal action, has made this part of the sector very jittery with providers choosing not to renew or bid for over 270 contracts owing to a reluctance to take on potential sleep-in liabilities. The estimated liability of £400 million is in our view an under-estimate, as it doesn’t reflect the additional HR and finance time charities are having to, and will have to, put in to resolve payments at a local level – turnover in the sector means that chasing ex-employees, many of whom may be foreign nationals, will be a nightmare. Imagine a scenario of charities lodging HMRC-forced financial settlements to closed bank accounts, which, after a period of time, will be collated by banks and re-allocated through charitable funding. Even Yes Minister couldn’t write that script.

Following a decision on the Mencap case, probably in July, the sector will look to November when the back-pay bill will become due. Those Christmas messages about giving a little to charity for those in need could be mighty powerful, as elderly and disabled people find that the services they rely on, are simply no longer there.