LGA Responds To Care Home Insolvency Figures

“Both councils and providers are in clear agreement about the scale of the challenge the system faces, and the need for genuinely new funding.”

Responding to figures from Moore Stephens on care home businesses entering insolvency, Cllr Izzi Seccombe, Chairman of the Local Government Association’s Community Wellbeing Board, said:

“Councils are protecting services that care for older and disabled people and are working extremely hard to ensure that every pound is spent efficiently and effectively.

“But councils can only do so much against a backdrop of chronic underfunding of adult social care, which already accounts for more than a third of councils’ total budgets. We estimate that government funding to councils will have reduced by an estimated £16 billion between 2010 and 2020.

“Rising demand and increasing cost pressures means many councils are having to make significant savings and reductions within adult social care, which is impacting on an ever more fragile provider market.

“Both councils and providers are in clear agreement about the scale of the challenge the system faces, and the need for genuinely new funding.

“The funding gap facing adult social care is set to exceed £2 billion by 2020 and this simply addresses the impact of inflation, the National Living Wage and demographic change; it does not address other key pressures such as unmet need, improved training, and pay and conditions for the social care workforce, including sleep-in costs. The majority of this pressure is with us now with an estimated £1.3 billion of the £2 billion needed to stabilise the care market.

“Government needs to address immediate pressures impacting on the system today, and ensure its Green Paper will deliver reforms to future-proof the long term sustainability of adult social care.”