One Third of Adult Social Care Providers Consider Exiting the Market Amid Financial Pressures

Adult social care providers have urged the Government to work with them to put the sector on a sustainable footing in the face of unfunded rising costs and deepening workforce challenges.

This comes as a new report, launched at the Care England conference in London today, revealed that one third of adult social care providers, including half of smaller organisations, have considered exiting the market in the past 12 months.

The Sector Pulse Check report, a piece of independent research commissioned by national learning disability charity Hft and Care England, the largest and most diverse representative body for independent providers of adult social care in England, illustrates the unique challenges facing the sector following the pandemic, cost of living crisis and decades of under-investment by central Government.

Based on a representative survey of care providers in England, the report describes how cost pressures, including sky-high utility bills – rising by as much as 500% for some providers – and increasing, unfunded workforce pay resulted in 82% of providers being in deficit or facing a decrease in their surplus in 2022.

Financial and workforce pressures have also seen 42% of providers forced to close parts of their organisation or hand back care contracts to Local Authorities.

One survey respondent described the current climate as “genuinely the most perilous period in the organisation’s 50-year history,” going onto say that their “ability to provide residential care and supported living is seriously compromised.”

The Sector Pulse Check report illustrates that workforce-related cost pressures, driven by increases in the National Living Wage, were a standout concern for providers, with 92% citing workforce pay as a key pressure on their organisation.

Concerningly, 81% said that Local Authority fee increases did not cover the increasing costs of workforce pay in 2022.

Low wages relative to other sectors, as well as a perception that better opportunities exist elsewhere, were identified as key drivers of difficulties in recruitment and retention, with 95% of respondents saying that increasing pay would have the most impact on boosting staff numbers.

Cumulatively, the impact of financial and workforce challenges faced by the adult social care sector leave some of the most vulnerable in society at risk of not being able to access the support they need, and has a knock-on impact for wider society, families, communities and the NHS.

The foundations for a sustainable and new-found future have been set out by Hft and Care England in the report’s recommendations. Despite the difficulties facing many care providers, the organisations describe an unwavering desire to work with Government to harness the sector’s innovation, energy and commitment to ensure those who draw on care and support are empowered to live the lives they choose with dignity and independence.

Kirsty Matthews, Chief Executive of Hft, says: 
“The crisis of the pandemic was swiftly met by another; a cost of living crisis, characterised by spiralling inflation and catastrophic increases in utility bills. Political and financial efforts have been focused on tackling the broader impact of these national challenges, but we are still at risk of forgetting about the mostly hidden social care sector and workforce which has determinedly continued to support our society as the country lurches from one crisis to the next.

“As a provider, I empathise with my peers across the sector having to close services and turn away referrals because of financial constraints and staff shortages. This is made more critical at a time when we need to further support our partners in the NHS by preventing admissions to hospital or enabling the discharge of people to social care.
“We can no longer afford to ignore the fact that our sector is being driven out of the market without acknowledging the devastating impact this is having on the lives of the people who draw on our support, the National Health Service and the wider economy.

“We hope our research illustrates key issues that Government could work to address in the short term to provide a longer-term solution to ensure the sustainability of this very important part of society.”

Professor Martin Green OBE, Chief Executive of Care England, says: 
“The Sector Pulse Check report corroborates many of the concerns I – and others in the sector – have been raising with Government for many years.

“We want to craft a vision that enables people to live well, through a system of support in which health and social care systems act in a coordinated fashion focused on those who draw on care and support and are financed adequately and appropriately to allow for innovation and investment.

“Now is the time to shift the needle. This needle needs to point to a new future, one which sees social care as part of the solution in terms of how we look after our nation. We require a new vision where success is measured in outcomes, and in terms of the benefit delivered to people and communities more widely. The whole system needs to work together with a shared vision and purpose to ensure this becomes a reality for all.

“Organisations, staff and the people we support are all suffering as a result of the current roadmap. This landmark report must be the last which reaffirms the current reality and it is incumbent upon Government to respond if the sector is to continue to provide quality care and support. There is an opportunity to lay the foundation for meaningful reform, within the current funding envelope, and it is one that should be grasped with both hands.”

Among the recommendations made by Hft and Care England are that the Government develop a pay framework to establish a minimum care wage, align benefits, terms and conditions with NHS staff and establish a professional register for care workers in England.

In addition, they recommend that the Government continues to offer enhanced support for energy costs equivalent to that offered through the initial Energy Bill Relief Scheme expiring on 31 March 2023, and remove the 5% VAT surcharge currently applied to energy bills until energy prices stabilise closer to 2021 levels.

The full report can be found here.