One third of social care providers were forced to shut services last year, report finds

21 Apr 2022 News

Over a third of social care providers were forced to shut services last year due to a “perfect storm” of pressures facing the sector, Hft has found.  

Social care charity Hft surveyed 62 social care providers in its 2021 Sector Pulse Check. The annual report is the fifth conducted by the charity. It was created in partnership with independent economic organisation Cebr. 

The report found 43% of providers had to close down some parts of its organisation or hand back marginal contracts to their local authority in the last year. 

Not only that, a quarter of those surveyed offered care to fewer individuals due to being understaffed or multiple cost pressures.  

Social care organisations with a decreased surplus rose from 52% in 2020 to 71% in 2021. This 71% includes those companies that are operating in a deficit, with costs exceeding funding. 

Half of the respondents said they had to dip into reserves to stay financially afloat last year. 

Hft is now calling on the government to redirect additional funds from the Health and Social Care Levy into social care straight away. 

The charity has penned a letter to the government and minister of state for care, which has been signed by over 20 chief executives of care providers. 

Main financial pressures

Rising wage bills were the main pressure for care providers in 2021, with 94% of respondents citing it. This is an increase of 15% from the year before. 

Kirsty Matthews, CEO of Hft, said: “Despite the introduction of a higher National Living Wage earlier in April, record inflation means that, in real terms, most front-line staff will not see a pay uplift and workforce challenges will persist as employees cope with the cost of living increase.”

Almost half of the survey sample stated they would need to raise their hourly wage rate to be in line with the new National Living Wage, which is set to increase to £9.50 this month. 

Some 80% of organisations say the fees they receive from local authorities are not enough to cover the wage bills, which means providers will be forced to top up employee wages. 

Local authorities will fail to cover 7% of wage bills for the social care workforce, which equates to around £640,000 per provider, Hft said. 

Depleting workforce

Another key concern in the social care sector is the recruitment and retention of its workforce. The average vacancy rate for social care sector jobs in 2021 was 16% - a 10% increase from the year prior. 

Not only that, but the average staff turnover was 20%, which equates to one in five new starters leaving the sector within the first 12 months. 

Hft believes higher pay, clearer routes of progression and greater respect for the sector would alleviate some of these challenges. 

Matthews said: “Social care staff should be paid a fair wage, one which is commensurate with the responsibilities of the job and that will help reduce high turnover and vacancy rates in the sector.”

Those Hft surveyed feel the government does not value social care as highly as health - 97% said they do not think social care and health are equal priorities for the government. 

Some 94% believe this is demonstrated through social care and health not having an equal status in terms of funding. 

‘Voluntary sector services are becoming unviable’

Dr Rhidian Hughes, chief executive of the Voluntary Organisations Disability Group (VODG), said: “This year’s Hft Sector Pulse Report clearly exposes the extent to which rising cost pressures and critical workforce challenges are impacting on social care providers and the essential care and support services they deliver for disabled people and their families. Consequently, voluntary sector services in particular are becoming unviable, and it is people who draw on social care, and the workforce supporting them, who will be hit the hardest.”  

Hughes said care and support services for people with life-long disabilities are the “hallmark of an equitable society” and must be maintained through a sustainable social care system. 

He continued: “VODG supports Hft’s call on government to redirect additional funds from the Health and Social Care Levy into social care from year one. This would help alleviate some of the immediate pressures being harshly felt today and go one step towards enabling state-funded services to continue delivering essential services into the future. We strongly encourage government to act on the evidence presented today.” 

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