David Miles says short term outlook for care business negative as firm releases half year results
The chief executive of housing and social care contractor Mears has said the government鈥檚 decision to introduce a national living wage and delay reforms to social care funding has turned the outlook for the sector 鈥渘egative.鈥�
In a statement in the firm鈥檚 half year results, chief executive David Miles hit out at the lack of long-term plan for the sector, and chancellor George Osborne鈥檚 decision to introduce a 鈥榣iving wage鈥� for workers over 25.
Miles said: 鈥淭he Government鈥檚 decision to delay reforms to social care funding would appear to leave it with no plan for Social Care, with funding reform having gone backwards five years.
鈥淭he recent Budget announcement regarding the National Living Wage has further increased pressures on councils, trusts and care providers. The sector has reached breaking point with a number of our competitors looking for the exit.鈥�
The comments come after contractor Interserve warned last week the living wage decision will knock 拢10-15m off the firm鈥檚 profit in 2016. Mears didn鈥檛 indicate there would be any direct impact of the decision upon expected profit.
Mears鈥� half year results to June 30 saw pre-tax profits at Mears鈥� rise by 3% to 拢19.2m on the back of 拢430m in revenues.
A strong performance in the social housing sector saw the firm win 拢185m of tendered contracts for the year to June 30, the Group鈥檚 care divison on 拢35m of new work. Total revenue rose marginally to 拢430m from 拢428.1m in 2014.
Mears Group鈥檚 forward order book was down 拢500m to 拢3.2bn from 拢3.7bn due to short-term delays in bidding opportunities in the last twelve months.
1 Readers' comment