CARE providers have warned councils must fund services if they are to pay higher wages and maintain standards.

The Action Group a large social care provider has told MSPs that wages have already fallen as a result of cuts and keeping staff is a problem.

It said research has shown that the new ‘living wage’ announced by Chancellor George Osborne, to increase to above £9 by 2020, will add up to £300m to the cost of social care in Scotland.

The group argued where it was once an employer that paid well above the minimum wage, since budget cuts have hit it has dropped to not much higher than the minimum.

The group’s chief executive and union representatives from Unite gave a written submission tot eh Scottish Parliament Economy Committee on its inquiry into fair work.

It said in 2004 a support worker was paid a starting salary of 45% above the national Minimum wage, but since then the difference has fallen to just 7% above the latest minimum wage rate this month.

It stated: “The cost –mix for delivering a social care service is dominated by staff costs (about 85%) and most of that is in the front line. It follows that a real cut of one third in what councils pay cannot be absorbed in ‘back office’ costs, it lands on staff.”

It told MSPs regulation and quality standards have increased and care needs have moved to a round the clock system.

It said: “So this is a regulated professionally managed service for vulnerable children and adults delivered 24 hours a day 365 days a year.”

The new living wage of £9.35 by 2020 will, it argues increased staff costs by 20% which means it argues the hourly rate paid by councils needs to increase by 15% to around £18-£19 per hour.

It said: “Of course, we could agree with the exhortation that paying the (old) Living wage is the right thing to do. The Action Group did pay well above that equivalent level in the past. Our inability to do so now is a direct result of council’s actions since.”