Third of adult care providers consider leaving market amid cost pressures, report finds

A new report has found that a third of adult social care providers, including half of smaller organisations, have considered exiting the market in the past year.

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

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

The report was commissioned by learning disability charity Hft and Care England, the main body for independent adult care providers in England.

One survey respondent described the current climate as ‘genuinely the most perilous period in the organisation’s 50-year history,’ adding 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. Furthermore, 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.

Kirsty Matthews, chief executive of Hft, said: ‘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.’

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.

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