We wrote about the plight of Southern Cross 10 days ago and how the government could not afford to let it go under.
A similar commentary has been made in today’s Guardian and is well worth a read by interested parties.
It is a case of basic economics and needs a case of Maggie Thatcher style hand bag common-sense as the cutting has gone to far. If the costs are £ you can survive if you income is £0.95. Indeed no business can survive on this narrow a margin for very long.
it is true that the sector was a license to print money but no longer.
By all means make it a survival of the fittest by challenging suppliers on costs and efficiency but as labour is key it is an undeniable fact that costs are rising and will continue to rise due as much to international factors as local demand.
Wage costs have been held down at the expense of the required skills but even Polish workers have little interest in the care sector as wages are not much above minimum wage for long and anti social hours.
The government itself has increased the pressure with an increase in employers national insurance in April and both Agency Workers Directive and an increase in the minimum wage coming into force in October.
Don’t be surprised to see some care home casualties along the way and the only beneficiaries will be the insolvency practitioners and business lawyers brought in to sort out the mess..
Author: Chris Slay
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