The government recently announced the introduction of a new National Living Wage (NLW) for working people aged 25 years and above. The impact of the National Living Wage will vary significantly across different businesses, but will be particularly significant for care homes, and comes after unprecedented regulatory changes have been implemented in across the sector.
What will the National Living Wage mean for care homes?
Scott Sanderson, Healthcare Partner, said: “In a year with significant regulatory changes, increasing compliance and funding burdens, this announcement places further pressure on care home owners to balance the books and keep an eye on their finances. This introduction will no doubt have to be factored into the annual budgets and, with the year ahead looking set to be another challenging one for care homes, it may have a significant impact on many operators.”
“With CQC now recognised as the financial regulator for the sector and an increased focus on the financial aspects of operators, this rise further compounds the need to prepare annual budgets and keep accounting records up-to-date, in order to monitor the home’s risks and ensure financial sustainability. One particularly important focus of care homes should be that of performance benchmarking, which can help highlight areas of concern or opportunities and, of course, highlight where your home is performing well. We should have details on the latest report in the coming weeks.”
Looking ahead in the care sector
The care sector continues to be challenging for operators, with significant regulatory changes coming into effect on 1 April 2015, coupled with increased compliance and funding pressures, and now the introduction of the National Living Wage.
The next 12 months promises to eventful for all involved in the sector, as we discussed in our Care Sector 2015/16 Outlook earlier this month.
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