The main representing organisation for independent providers in England has warned that the adult social care industry is “on the precipice” in terms of costs.
According to Care England’s annual report, more than two in five (42%) of organizations had to shut down a section of their business or return contracts to local governments because of financial constraints.
The majority (82%) of providers saw a deficit or a decline in surplus last year, and worker salary was identified as the key source of cost pressure.
According to the report, 60% of providers also considered utility costs to be a significant source of cost pressure. In some cases, these costs had increased by as much as 500%.
Based on a survey of 192 organizations, the report was created for the first time in collaboration with the HFT care provider for individuals with learning difficulties.
Among these, 28% look for senior citizens and 67% care for those with learning difficulties. Throughout December and January, the survey was conducted.
The adult social care sector is at a crossroads, according to the research. 82% of adult social care providers in 2022 either had a deficit or saw their surplus decline.
Over half (45%) of those who reported a reduction in their surplus predicted that it would become a deficit within two years.
A third of providers thought about quitting the market last year due to cost concerns, while among smaller providers (those with fewer than 250 employees), the percentage increased to nearly half.
According to the research, roughly a quarter of providers claimed they provided care to fewer people to reduce costs.
The survey stated that although 92% of providers claimed that workforce pay was their top cost issue, the low pay for care professionals was also seen as the biggest impediment to recruitment and retention.
According to the report, high staff turnover and vacancy rates have an effect on those who require care. Nearly one fifth (18%) of providers reported having to close services because of a lack of staff, 58% had declined admissions because of a lack of staff, and 69% had increased their use of agency staff as a result.
Care England stated that it is “obvious that remuneration is the major driving reason behind this,” as 42% of providers reported a decline in the number of applications for care professionals in 2022.
They suggested that the government create a pay structure to set a minimum care salary that is higher than the National Living Wage and is linked to NHS band 3.
Adult social care appeared to “slip down the list of priorities in 2022,” according to Care England CEO Professor Martin Green and Hft CEO Kirsty Matthews in their joint foreword to the study.
“As one chaotic period—the pandemic—came to an end, it was rapidly followed by another, the cost-of-living crisis, which was marked by skyrocketing inflation, drastically rising electricity costs, and pay strikes in the public sector.
“Adult social care has appeared to drop down the list of priorities in 2022, despite being thrust to the forefront during the pandemic.
“Political and monetary efforts have been directed at addressing these national issues, with very little recognition of the value of adult social care, either inherently or in terms of its essential role in assisting the National Health Service and wider economy.
Nothing more exemplified this than the government’s decision to postpone long-term reform of the industry, which was announced in the autumn budget.
Meanwhile, responding to Wednesday’s Budget decisions, Care England condemned it as a missed chance “to strengthen this progress and move towards a sustainable funding settlement for the sector”.
“It was a chance that, regrettably, the Government did not take, with a noticeable lack of any announcements targeted at the sector,” said Prof. Green.
On how to sustainably fund and assist our crucial sector for the long term, he urged political cooperation.