Falkirk Council admits concerns about how health care deal will be paid for

The new style Integrated Health and Social Care service will support objectives shared by health professionals and social workers to protect the most vulnerable in our communities.

But the way it is to be funded on the orders of Scottish Government Finance Secretary John Swinney has caused the biggest single row in town halls across the country.

The source of the anger being felt by the leaders of the majority of local authorities is Mr Swinney’s insistence that part of the second £125 million instalment of the £250 million available to deliver the change should support his government’s goal of ensuring all social care workers - including those in the independent and private sector - earn the Living Wage of £8.25 an hour.

In his letter outlining the strategy he admits: “This assumes that private and third sectors will meet their share of the costs” – something council bosses across the country have serious doubts will happen.

When Falkirk Council received details of its £335 million settlement offer it was told to expect a total of £7.4 million from its joint board partner NHS Forth Valley.

Falkirk was not the only council to question how successful its partnership with NHS Forth Valley might be given the prospect of losing some of the cash to pay wages to workers contracted in.

Even as the budget was being finalised last week, the director of corporate and housing services, Stuart Ritchie, was warning councillors: “With respect to the IJB Integration Fund there still remains some lack of clarity and the council seems to be being asked to deliver an outcome with respect to the delivery of the Living Wage by external contractors, where it is not the master of its own destiny.”

Councillor Linda Gow is a member of the IJB said: “This £250 million was top sliced from the local government settlement and Mr Swinney is quite explicit about how it should be spent.

“The first tranche will support additional spend for care at home, activities to prevent people having to go to hospital and expanding social care to support the objectives of integration, but much of the second one will be used to pay the Living Wage to contractors. The government has suggested it would be reasonable to assume employers would pick up 25 per cent of the rise, but we have no negotiating power to insist on this.

“To put this in context, locally we spend around £59 million on external service provider costs for adult services. If the providers did take their share as suggested we would still require to find six per cent which on £59 million would be £3.5 million. Our expected share on each tranche is £3.54 million, so not a good outcome for us.

“We pay our staff the Living Wage and believe our contractors should too. It is the fact our budget will now be used to subsidise contractors who do not value their staff highly enough.”

Council leader Craig Martin said: “The use of the £250 million taken from local government and given to health boards to fund private companies to pay their staff the Living Wage is something I would expect from George Osbourne.

“How ironic councils are forced to reduce their staff to give money to private companies to boost their profits.

“The Living Wage should be available to all workers in Scotland, but job losses should not be inflicted on the public sector to pay for it.”