1 Background to pay cut dispute

Adult Social Care budgets across the country are facing significant challenge.  In April 2013 The Local Government Association published a report entitled Adult social care spending round submission.  In this report they showed that Councils have had to reduce their adult social care budgets by 20% over three years.  For 2013/14 81% of Councils were looking to shift to cheaper settings, 61% stopping ‘unnecessary’ services and 60% reducing the number of people in receipt of care.

In Barnet the local Council have faced a cut of 26% in funding across all services which equates to £72.5 million.  The budget for Adult Social Care in Barnet is due to have reduced by £23.16 million by April 2015 with a further target of savings over the next five years of £12.6 million.  Against a rise in demand for the services this is unprecedented.

When Your Choice Barnet was created this level of change was not anticipated and whilst it can be argued that it should have been, as an organisation delivering excellent services in Adult Social Care and in Barnet we are not in control of the rates that the Council sets. We can only respond to them so in 2013 we did exactly that and began a series of changes that delivered significant savings.

Although we delivered significant savings we had still not managed to save enough to ensure the long term viability of our organisation and our services and therefore we introduced one final change, a 9.5% reduction in pay for all Your Choice Barnet employees.  This change, whilst significant, was intended to secure future jobs and minimise further reductions or changes.

2 The pay cut dispute

2.1 Facts and figures behind the pay cut

Put as simply as possible the average rate paid to us by Barnet Council is £18.43 per hour and prior to our 9.5% pay cut it was costing us £21.81 per hour to provide the service.  This reduction in pay doesn’t mean we make a profit it simply means we have adjusted our costs so we do not lose money every time we spend an hour delivering our services.

This issue isn’t the fault of our brilliant employees who deliver exceptional services but it was a situation that couldn’t continue.  We carried out two different benchmarking activities which demonstrated that YCB salaries were at least 20% more than their equivalents within the Care and Support sector in London.

Our aim is to reduce salaries so that we can make the necessary savings, whilst ensuring that our salary levels are still competitive enough to attract and retain staff with the right skills and competencies to provide a high quality of service. In spite of the 9.5% salary reduction for all staff, including managers, YCB employees are still paid well above the median identified in the benchmarking exercise.

The range of pay for our support staff after the pay reduction is between £8.80 and £12.40 per hour with 69% of our employees on the higher rate.  Compare this to the national minimum wage of £6.50 per hour from 1 October 2014 and the London Living Wage of £8.80 per hour.  A quick search for Support Worker vacancies in Barnet will show between £8.80 and £10 per hour is the going rate.  We commit to the London Living wage and have no employees on less that this rate.

In addition to hourly rates we also provide the following benefits:

  • 22/24 days annual leave rising to 29 days after 5 years’ service.  74% of our employees are on 29 days annual leave
  • Local government pension scheme.  The current employer contribution is 24.3% which includes 9.8% to fund the pension deficit
  • Occupation sick pay with up to six months full pay and a further six months half pay

2.2 Looking for alternative options

The decision to implement the pay reduction was the most difficult thing we have done.  We carried out a legally compliant consultation process exploring options with our recognised unions and employees.  As a result of this process, our employees put forward alternative ideas but unfortunately these did not achieve the savings we needed to achieve.

Following implementation of the change on 1 April 2014 we embarked on a series of meetings with the unions and ultimately ACAS to try to find alternative options and although we provided a range of further changes and a proposal to implement a profit sharing model if we made a surplus, none of these were acceptable to Unison’s members and therefore they voted to begin industrial action.  We even made a one off payment to all employees equivalent to one month’s pay reduction in order to try and find an acceptable solution.

Monday 8 and Tuesday 9 September

Unison issued a schedule of proposed industrial action on 7 September. The first two days of strike action took place on 8 and 9 September. Despite specialist services Flower Lane and Rosa Morison being forced to close, YCB staff who rejected strike action went the extra mile to continue to provide support to almost 80% of customers across YCB’s six schemes.  Some customers from these two services were supported instead from Valley Way respite service. Customers of CommunitySpace day service, BILS day service, Supported Living services and Valley Way continued to have services provided as usual with minimal disruption to their routine and family life.

Wednesday 17 and Thursday 18 September

YCB received notification on 10 September of further strike action on 17 and 18 September. As happened last week, YCB continues to work closely with families to ensure minimal disruption.

3. FAQs – relationship with Barnet Council and others

Q1: Will the Council take YCB back in-house?

A1: Discussions with the Council have confirmed that LBB do not intend to take the services back in-house and run them. Further, we have had Council Members’ approval to extend the contract by a further two years. In the very unlikely scenario that the Council has no option but to step in they would be likely to find other providers. This would create further uncertainty for the people we support and their families and of course greater uncertainty over staff pay and terms and conditions in the future.

Even if the Council returned the services internally, as they have set the market rates they will not be able to justify paying higher salaries for these services.

Q2: Why can’t the Council pay YCB more for services delivered? And why won’t they reimburse YCB for ‘no shows’?

A2: As explained in the introduction the Council does not have the financial resource to increase the payment terms for YCB. The terms and conditions the Council has with YCB are the same as they have with other care providers and are typical of those of the sector as a whole. The rates of pay for Adult Social Care are a national issue that cannot be resolved by Barnet Council paying one supplier higher than market rates.

As standard the Council will only pay for care provided. This incentivises providers to ensure minimal no shows but they would also expect any care provider to budget for a small number of missed appointments.

If the Council did pay Your Choice more money than our competitors it could leave them open to challenge from other providers and because they are our shareholder it could be classed as state aid.

Q3: Can you guarantee this will be the final change?

A3: We have made it clear throughout this process that our only intention in this change is to align our finances so that we can break even as an organisation. We are on track to achieve this. We have no intention of making further reductions but cannot guarantee this as our income levels and rate of pay that we are paid by our customers is also not guaranteed.

Q4 What is the Barnet Unison 8 point charter?

A4: Following the most recent discussions with Unison they have produced an 8 point charter which they believe will make Your Choice financially viable which is as follows:

  1. Barnet Homes writes off £1million loan
  2. Barnet Council stop penalising YCB for no shows
  3. Barnet Council pays up front to YCB in order to help the cash flow situation
  4. Barnet Council pays the going rate for the services being offered
  5. Barnet Council conducts an immediate investigation into why Adult Social care services have referred only a handful of referrals in the last 2 and a half years
  6. Senior management and other service level agreement costs imposed on YCB are reduced
  7. YCB & Barnet Council find a more efficient way to invoice for services.  The current arrangement is that Barnet Group invoice Barnet Council and then YCB invoice Barnet Group
  8. YCB is allowed to independently procure its own support services and not be forced to use Capita CSG services

Q5 Why can’t you implement these changes and reinstate the pay reduction?

A5: In respect of charter points 2, 3 and 4, these all relate to Barnet Council treating us differently from any of the other organisations in the Borough.  Barnet Adult Social care services over 7,000 customers in the borough of which we work with approx. 200.  Whilst we would be delighted to be treated as a special case when you consider the pressures on the Council’s finances we cannot see how this is achievable.

In respect of the other options we have already looked at these areas and recently offered to reduce the level of pay cut from 9.5% to 8.31% as a result of taking forward some of the options but this was rejected by the Union members.  Others like improving the invoicing process will not impact the savings required.

Q6 If these are the solutions being put forward by Unison why do the strike banners say about transferring the services back to the Council?

A6: We are not clear on this either. In our recent negotiations Unison confirmed this was no longer their suggested outcome and the 8 point charter doesn’t mention it

Q7 What is the relationship between Your Choice Barnet and Care UK and why did staff from Doncaster’s Care UK team join Your Choice staff at a demonstration?

A7: There is no relationship between the organisations.  Unison members working for Care UK in Doncaster have been striking over a 35% cut in terms and conditions and are fighting for pay to be increased from £7 per hour to £7.65 per hour

Q8 Are other organisations having to make changes too?

A8: Yes many other organisations are making changes, we have started from a worse position because our terms and conditions were not previously aligned to the market rates but we have seen other organisations make cuts of up to 35%.