A DOMICILIARY care services business has been forced to terminate a £1m contract with a Merseyside authority because inadequate fee levels mean it is no longer financially viable.
In 2014, WarrenCare Ltd was awarded a £1m contract with Wirral MBC to deliver at home care for an initial three year period. Since the contract commenced the introduction of pension auto enrolment, the Living Wage in April and other rising costs have meant that the company can no longer afford to service the agreement and maintain its high standard of care.
The decision will see 65 Warrencare staff transferred to a new care provider instated by Wirral MBC, with full TUPE protection.
WarrenCare’s chief executive Richard Walker said that if the company continued with the contract it would effectively be subsidising the local authority.
He said: “Regrettably we are being forced to terminate a contract with a local authority due to their unwillingness to meet the true costs of the service and allow us to properly fund staff and infrastructure costs.
“Over the two years we have provided high-quality services in Wirral a number of additional costs including pensions, increased travel time, national living wage and two minimum wage increases have been applied. Fee consultations recently ended following six months of negotiations.
These increased costs have not been recognised fully by Wirral MBC, he said, despite the company providing commercial and financial information so that the level of fees paid for each hour of care could be “adequately and fairly” increased to cover the rising costs.
He said: “Despite this information being provided, tested and accepted as reasonable against cost of care calculators, the council has been unable to address the full costs of delivering a home care service.”
The Council states that £7.13 is the average pay rate per hour for an experienced care worker in Wirral – a figure WarrenCare says is not representative or accurate.
“This doesn’t include any weighting for anti-social hours, senior or higher qualified care workers, nor does it fully compensate workers for the time spent travelling and waiting as part of their employed time. It is almost 30% less than the United Kingdom Home Care Association (UKHCA) published minimum rate for care,” said Walker.
“We believe the model of commissioning in Wirral is fundamentally flawed and we will not support care on the cheap any longer. We are supporting safe transition of services to new providers willing to deliver at this level and we wish all affected staff and service users our best wishes for the future,” he said.
WarrenCare has provided care and support in Merseyside for twenty years and became part of the Optimo Care Group in 2010. It has been consistently inspected and rated by the Care Quality Commission (CQC) as “Good” and meeting all requirements.
All care services will end on the 17th July in the Wirral area, following the completion of a safe transition of all service users. Optimo employs 700 care and support workers and operates from a number of office locations across the north. It offers home-based care solutions including: homecare, domestic help, home respite, learning disability, supported living, support for children and families, as well as specialising in dementia support.
Points of clarification:
26th April Status as Tier 1 provider zone 4 and Tier 2 provider zone 3 provider terminated by Wirral MBC via voluntary termination clause B30.1 as a result of not accepting all referred work. Tier 1 status requires acceptance of all referrals. The letter of termination from Wirral MBC provided option to remain as Tier 2 provider zone 4, WarrenCare confirmed at a follow up meeting that this would only be an option if fee levels were uplifted to allow safer recruitment following the end of the consultation outcome of fee discussions.
25th May WarrenCare confirmed in writing their voluntary termination of the remaining tier 2 status as the fee levels were not going to be increased.
2nd June Wirral MBC request in writing that we consider rescinding our voluntary termination.
10th June, following formal outcome of the fee consultation we reconfirmed in writing our voluntary termination of the contract and confirmed our intention to fulfil all required notice, work closely with officers and incoming provider to ensure an orderly transition to new provider.
21st June – Wirral confirm a mutually agreed early termination and transfer date of 18th July 2016 to ensure a safe transition to the new provider selected