Nearly 100 councils across England have reported that care home firms have cancelled their contracts with them due to insufficient payments, BBC Panorama will report tonight (20 March).
The overstretched companies have stopped working for local councils, saying that they cannot deliver the care home services under the funding they have been given. Some are also unable to recruit and retain sufficient staff, the BBC said.
Ninety-five care home companies have cancelled their contracts, according to a BBC Freedom of Information request, which was responded to by 197 of 212 UK councils.
The Local Government Association (LGA) said that the crisis is due to the historic underfunding of the social care sector and the changing demographics of the ageing population.
In response to this, the Government said that English councils have received £9.25bn in social care funding.
The Government has also said that in addition to the £2bn set out in the recent budget for social care over the next three years, it will bring forward more proposals later this year to ensure the financially sustainability of the social care system.
In the last three months, 69 home care companies have closed, and a quarter of the UK's 2,500 home care companies is at risk of insolvency.
In order to cope with growing demand for both care homes and in-home care in England, the workforce will need at least two million additional carers by 2025, according to the Centre for Workforce Intelligence.