Minimum wage rise strains care home budgets

national minimum wage is making it increasingly difficult for care homes to
recruit and retain staff.

survey of 1,500 proprietors by the Federation of Small Businesses has found
that the majority of care homes are being under funded as local authorities
have failed to budget for the increased wages.

93 per cent of respondents stated that the rise from £3.70 to £4.10 on 1
October, 2001 was not reflected in the prices paid by local authorities to
residential customers.

asked about how this had impacted upon the viability of their business, over 15
per cent said that they were now in trouble or facing closure.

on the findings Maddra Ahmed, chair of the National Care Home Association,
said, "The increase in the minimum wage has had an impact of the viability
of many businesses within the care sector as the increase in wages was around
10 per cent.

By Phil Boucher

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