Birmingham City Council was forced to contract out care for the elderly to the private sector due to the rising staff costs under equal pay legislation, it has been claimed.
Council deputy leader Paul Tilsley said that they could not compete with the private sector following a string of costly equal pay claims by women in care roles.
He made his comment as the Tory-Lib Dem Cabinet confirmed its decision to freeze the fees paid to private care homes for the fourth year running by rejecting a formal challenge from the health scrutiny committee.
It is feared that as care homes faced with rising costs, in particular due to soaring energy bills and increased staff costs, could be at risk of closure or quality of care could suffer if fees are not increased.
The council had asked care home providers to open their accounts for a detailed investigation into the costs and risks of running a care home, but only 11 per cent of the 745 homes which accommodate council clients took part and no evidence was found to justify a fee increase.
Opposition Labour deputy leader Coun Ian Ward (Shard End) said that the whole exercise was flawed. “We closed or sold our care homes. We have outsourced these services because it is believed that the private sector can provide them more efficiently. But now we are telling them how to run their businesses. Shouldn’t we just bring them back in house if we know best?”
But Council leader Mike Whitby (Cons, Harborne) replied that they are not telling homes how to run their business but ‘engaged in a sophisticated public and private sector relationship’.
His deputy Paul Tilsley (Lib Dem, Sheldon) added: “It was the equal pay legislation. We priced ourselves out of the market. You can see from the study what private sector homes pay their staff, we could not compete with that.”
According to the study by consultants Madi Turpin and James Byatt of Solar the average hourly rate for staff is £7.11 per hour, or £11.45 for agency staff.
The challenge over the pay freeze was issued in particular because of the poor participation in the study and fears that improper consultation could lead to a costly judicial review over poor consultation – just as the council had suffered last year over changing eligibility criteria for adult social care.
Chairman of the health scrutiny committee Coun Deirdre Alden (Cons, Edgbaston), who had issued the challenge, was also alarmed at the short time scale, just three working days, over which it had been considered.
She said: “There seems to have been indecent haste to bring this back to cabinet. The scrutiny committee takes this very seriously and asked the cabinet to look at this again. There does not seem to have been enough time for a proper look. There does not seem to have been much thought put into this.”
But cabinet member for adults and communities Sue Anderson (Lib Dem, Sheldon) said that there had been much discussion over the 11 per cent turnout before the initial decision was taken. She said: “We had a very long discussion about the low response level during the pre-cabinet meeting.
"We decided that the care homes had been given ample opportunity to put their case and that invitation is still there as part of the ongoing process.”
She added that the council holds regular meetings with the care home providers and has recently adopted a new framework for commissioning care which would further improve the process.
“We want a care home sector which is stable and we want to improve the quality of care, just as we have significantly improved the quality of care in the last few years.”
Coun Alden replied that such discussions needed to take place in a public forum to ensure transparency. “I know that there will be private meetings and discussions, but some of that needs to be reported in public so that the rest of the city knows that the issue has been taken seriously.”