One-third of adult social care providers have considered exiting the sector in the past 12 months, according to a new study commissioned by charities Hft and Care England.
The Sector Pulse Check report, launched at a Care England conference in London, states that the financial position of the adult social care sector is ‘on a precipice’. The study found that in 2022, 82% of adult social care providers were either in deficit or experienced a decrease in their surplus. Of those who reported a decline in their surplus, almost half (45%) reported that it would turn into a deficit within two years.
Nearly two-thirds (60%) of providers responding to the study said rising utility prices were a significant cost pressure in 2022, with bills increasing by as much as 500% for some.
However, the most significant cost pressure was workforce pay, highlighted by 92% of providers, with annual increases to the National Living Wage cited as the most significant workforce-related cost. As many as 81% said that local authority fee increases did not cover the increasing costs of workforce pay in 2022.
Financial and workforce pressures have also seen 42% of providers forced to close parts of their organisation or hand back care contracts to local authorities, according to the report. Nearly a quarter of providers said they offered care to fewer individuals as a cost-saving measure.
The report also revealed difficulties in recruitment and retention within the sector. In 2022, the average staff turnover rate was 25% and the average vacancy rate was 21%. Over two thirds (69%) of providers increased the use of agency staff, over half (58% had to turn down admissions to services due to staff shortages and nearly a fifth (18%) had to close services altogether.
Low wages relative to other sectors and a perception that better opportunities exist elsewhere were identified as the key drivers of these problems, and 95% of respondents said that increasing pay would have the most impact on boosting staff numbers.
The Sector Pulse Check report includes a number of recommendations for the Government, including the development of a pay framework to establish a minimum care wage above the level of the National Living Wage and tied to NHS band 3. The authors also state that the accountability for ensuring carers are paid sufficiently must be formally recognised as lying with the local authority/integrated care system and fee rates should be increased sufficiently to enable adult social care providers to pay carers in line with that minimum care wage.
Other recommendations include enhanced support for energy costs, the establishment of a professional register for care workers in England, an exemption on VAT costs for agency care staff and the streamlining of the international recruitment process.
Kirsty Matthews, chief executive of learning disability charity Hft, said: ‘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.
‘We hope our research illustrates key issues that Government could work to address in the short term to provide a longer-term solution to ensure the sustainability of this very important part of society.’
Professor Martin Green OBE, chief executive of Care England, said there was opportunity for ‘meaningful reform within the current funding envelope’ and it should be ‘grasped with both hands’.
He added: ‘Now is the time to shift the needle. This needle needs to point to a new future, one which sees social care as part of the solution in terms of how we look after our nation.
‘The whole system needs to work together with a shared vision and purpose to ensure this becomes a reality for all.’