Social care providers have again faced a challenging year and 2022 looks to hold more of the same, says the market-leading Social Care team at the law firm Royds Withy King.
Here are the three things the social care sector will need to address in 2022.
A workforce crisis
Social care providers are facing one of the largest workforce crises in living memory and it is set to get worse, says James Sage, Employment law partner and Head of Health & Social Care at Royds Withy King.
“It is estimated that the mandatory vaccination requirement for care home staff has resulted in 60,000 staff being dismissed. This will be exacerbated when the requirement is extended to the wider social care sector and the NHS with the pool of potential workers getting ever smaller. The Government estimates that 123,000 NHS staff will be dismissed when its policy is enforced, and experience tells us that a short-staffed NHS will come hunting for workers in the care sector.
“In addition, staff retention continues to be a challenge with attrition rates currently standing over 30% and for some providers considerably higher. This is likely to continue into 2022, not least due to staff burnout caused by the pandemic.
“Some providers are responding with increased pay rates and bonuses to fight off competition from the likes of Amazon, and we are likely to see more of the same in the new year. But this remains a real challenge for smaller care providers and those reliant on public funds to pay staff wages. An improved financial package for social care is required but it looks like the new money promised will now be diverted into the NHS with the pandemic continuing.
“On a positive note, the Migration Advisory Committee has recommended that care workers be added to the Shortage Occupation List, opening the door to overseas workers. This is urgently needed and it is hoped that the Government will listen. We also wait to see the results of recent government funding for recruitment and retention and hope that councils pass this on to providers as they are best placed to find creative new ways to recruit and retain workers.”
Independents leaving the sector
We have seen a significant lift in sales and acquisitions in the social care sector following the uncertainty of the last two years. It is being driven by providers disillusioned with the sector and lenders looking to exit, says Royds Withy King Corporate Partner Hazel Phillips.
“We have seen several mainstream lenders lose their appetite for the social care sector in 2021 and adopting a more aggressive position with care providers forcing in some instances a decision to sell. This is matched with increasing disillusionment in the sector from independents and family-operated homes following two extremely challenging years. We expect this to continue to drive M&A activity in the new year.
“On the plus side, there are lots of buyers and plenty of interest from private equity investors. Price expectations do need to be managed, particularly for homes reliant on more expensive agency staff. Sellers looking to go to market are advised to be well prepared as due diligence will be as detailed as ever, particularly around staffing costs and liability.
“The interest from private equity investors is likely to remain high throughout 2022 and despite recent criticisms surrounding their business model, we do not expect the government to introduce further regulation.”
Change to CQC ratings in 2022
The CQC’s rating system is changing. But will it drop in 2022 its KLOEs for more streamlined quality statements, asks Royds Withy King Partner Mei-Ling Huang?
“CQC appear to be heading towards slimming down its KLOEs and implementing a more numerically-based model. Scores on various criteria will be totalled to determine a rating. 2022 may see the introduction of more anodyne quality statements as the CQC tries to make standards more streamlined and comprehensible to the wider public.
“There is a very real worry that ratings will change without inspection based solely on the feedback the CQC receives with little consideration of bias or fact. The biggest unanswered question is whether care providers will be given any right to reply or to challenge a rating?
“We would urge care providers to engage with CQC in 2022 as much as they possibly can, either through their care association or inspection manager. It is vitally important that the voices of care providers are heard and that they fight for this right to reply.”