Staff face 8 per cent pay cuts as value of contracts drops 20 per cent
One Support to cut wages as it loses council care contracts
More than 200 staff at one of London’s biggest housing associations face pay cuts after councils slashed care contracts worth millions of pounds.
The 900 people employed by One Support, the care arm of One Housing Group, have been consulted this week with a view to reducing salaries by as much as £8,000 in some cases.
Around 250 individuals are likely to be affected and will see their pay fall by an average of 8 per cent. One Support has an annual turnover of £40 million.
The value of the association’s care contracts with local authorities has dropped by 20 per cent since the October 2010 spending review, but it would not specify what the current value is.
Kevin Beirne, group director of housing care and support, said it had taken on around £8 million of new contracts this year, but had lost contracts worth around £3 million.
One Support aims to reduce staff wages to mitigate against the cuts to its budget. Working hours and other conditions will remain the same.
The organisation provides supported housing services to 4,500 customers, plus floating support services across London and the south east. The new pay regime will be finalised by the end of the year.
Mr Beirne said: ‘To remain a competitive, financially viable provider we need to reduce our costs. Before taking the difficult decision to consider a review of salaries, we have implemented a wide range of cost management measures. As staffing costs account for around 80 per cent of contract costs we now have no other choice but to consider the possibility of pay reductions.’
The association is one of several care providers to review outgoings as councils tighten their belts, including Family Mosaic, Look Ahead and homelessness charity Centrepoint, all of whom revised staff pay deals.
A senior housing association director, who did not wish to be named, said organisations risked missing out on contracts if they did not cut salaries. ‘There is pressure on salaries as contracts are tendered out and the market is really competitive,’ he said.
Colin Innis, regional organiser for London at union Unison, which represents One Housing Group staff, said the proposals were unacceptable.
‘We’re consistently finding employers are under pressure from commissioning bodies… but rather than standing up to them and negotiating they are just rolling over.’
The union will hold a meeting with staff next Wednesday to decide how to challenge One Support’s decision.