One third of social care providers shut services in 2021, says Hft

More than a third of social care providers had to close their services permanently or hand back contracts to local authorities in 2021 according to Sector Pulse Check 2021 independent research by learning disability charity Hft.

Hft calls on government to redirect additional funds from the Health and Social Care Levy into social care from year one to ensure there is sufficient funding in the sector.

According to the research, 80% of those surveyed claim the fees they receive from local authorities to deliver care will not be enough to cover their wage bills, forcing them to dig deep into their own reserves to pay their staff a fair rate.

Astonishingly, one in 10 providers will need to cover 20% of their wage bill from their own reserves, rather than through fees paid by local authorities to deliver the right standard of care to those they support. The research found that on average, each provider surveyed will need to find £640,000 to cover the cost of wages, stretching the already finite resources of providers further.

Kirsty Matthews, chief executive of Hft 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.

“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.”

This is at a time when the sector is in a challenging financial position, with 71% of providers reporting they are either in deficit, with costs exceeding funding, or that their surplus has decreased. This has increased from 56% in 2020, according to the research.

More than 20 chief executives of learning disability care providers are supporting this call through a joint letter from Hft to the care minister.

“To ensure that care staff are paid a salary commensurate with the responsibility of the job, and to alleviate the recruitment and retention crisis in the sector, it is vital that additional funds are drawn down from the Levy this year. Only when the learning disability sector is placed on a sustainable financial footing and workforce challenges are addressed will care providers, and the wider health system, thrive together rather than merely survive,” added Matthews.

Dr Rhidian Hughes, chief executive of the Voluntary Organisations Disability Group (VODG), commented that voluntary sector services in particular are becoming unviable, adding that it is people who draw on social care, and the workforce supporting them, who will be hit the hardest.

He added: “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.”

Sector Pulse Check 2021 is Hft’s fifth annual Sector Pulse Check report, carried out by independent economics and business consultancy Cebr, and the first of its kind to focus primarily on learning disability providers.

Date published: April 20, 2022

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