Hospice sector reports £186m deficit as charity announces service closure

29 Mar 2023 News

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Alice House Hospice

Hospices have reported facing a deficit of £186m this year as one charity in northeast England has announced that it will close its long-term care unit due to financial pressures.

Umbrella body Hospice UK surveyed 101 of its members, 96% of which said they were budgeting for a deficit in the 2023-24 financial year largely due to rising staff and energy costs.

Energy bills for the sector are set to increase by £29m over the next 12 months, the organisation said, with 86% of hospices set to come to the end of a fixed price deal by the end of the year.

Meanwhile, Alice House Hospice charity in Hartlepool announced yesterday that it would close its long-term care unit as it faced a £755,000 shortfall for the year ahead.

More hospices in poorer communities likely to cut services

Hospice UK chief executive Toby Porter told Civil Society News that other hospices were considering cutting back services due to financial pressures, with those in poorer communities at most risk.

“Hartlepool, where Alice House is, these are economically challenged parts of the UK and I think that’s probably the part of it that I personally find most upsetting is that the communities that will feel the impact of this, it will be just another compounded inequality,” he said.

Porter said he knew of one other hospice charity considering closing services soon “but there are regions where things are sort of teetering”.

Around two-thirds of adult hospice income and four-fifths of children’s hospice income is raised through fundraising, according to Hospice UK’s research, with the rest coming through statutory funding.

Porter said a significant chunk of hospice charities’ fundraised income was from legacies, the value of which varied between communities.

“The ability of a hospice to fully fund and to increase funding to meet extra costs, and then a flat/declining statutory environment is hugely impacted on the ambient wealth of the communities,” he said.

“We get a lot of income from legacies, obviously, and high property prices are enormous variables in terms of how much income from legacies you get in different parts of the country.”

Hartlepool charity closes care unit

Alice House Hospice, which had an income of £3.8m in the year to March 2022, said its costs would rise by £380,000 in 2023-24 while its fundraising revenue was due to fall by £295,000.

“Following emergency planning meetings, we are working to reduce this deficit to a level that is manageable, in order to secure the future of the hospice,” said co-chief executives Sandra Britten and Nicola Haggan in a statement.

“We have therefore had to review any non-core services that are operating at a financial loss. 

“The continuing healthcare beds on the long-term care unit are operating at a loss of £275,000 per year, which we can no longer sustain.

“These beds – which provide a vital service – are partially funded.  Previously, this shortfall has been funded from our own financial reserves, which we no longer have.”

The charity did not confirm how many staff would be made redundant as a result of the long-term care unit’s closure.

A spokesperson told Civil Society News: “The decision to close the unit has only just been made and we are undergoing a consultation process to identify at risk roles and exploring a possible staff restructure.”

According to the charity’s latest accounts, it employed 159 staff on average during 2021-22.

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