The adult social care sector is “on the precipice” when it comes to costs, the largest representative body for independent providers in England has warned.
More than two in five (42%) had to close down a part of their organisation or hand back contracts to local authorities due to financial pressures, Care England’s annual report found.
The majority (82%) were either in deficit or saw a decrease in their surplus last year and workforce pay was cited as the most significant cost pressure for providers.
Utility costs were also seen as a significant cost pressure for 60% of providers with such costs having soared by as much as 500% for some, the report said.
The adult social care sector is on the precipice. In 2022, 82% of adult social care providers were either in deficit or experienced a decrease in their surplus— Care England report
The report, compiled for the first time in partnership with the Hft care provider for people with learning disabilities, is based on a survey of 192 organisations.
Of these, 67% provide care for adults with learning disabilities and 28% look after older people. The survey ran during December and January.
The report said: “The adult social care sector is on the precipice. 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.”
Due to cost pressures, a third of providers considered leaving the market last year while among smaller providers, which have fewer than 250 employees, the statistic rose to almost half.
The report said that almost one quarter of providers said they offered care to fewer individuals as a cost-saving measure.
Despite 92% of providers stating that their most significant cost pressure was workforce pay, the low level of pay for care staff was also considered to be the biggest barrier to recruitment and retention, the report said.
The report said that high staff turnover and vacancy rates are impacting people who need care, with almost one fifth (18%) of providers stating that they had to close services due to staff shortages, 58% having turned down admissions due to shortages and 69% having increased the use of agency staff as a result.
Some 42% of providers reported a drop in the number of applications for care staff in 2022, and Care England said it is “clear that pay is the key driving force behind this”.
They recommended that the Government develops a pay framework to establish a minimum care wage, above the level of the National Living Wage and tied to NHS band 3.
In their joint foreword to the report, Care England chief executive, Professor Martin Green, and Hft chief executive Kirsty Matthews said adult social care appeared to “fall down the list of priorities in 2022”.
They said: “The winding down of one turbulent period (the pandemic) was swiftly met by another; a cost-of-living crisis, characterised by spiralling inflation, catastrophic increases to utility bills and accompanying public sector pay strikes.
“While adult social care was propelled to the fore during the pandemic, it has seemed to fall down the list of priorities in 2022.
“Political and financial efforts have been focused on tackling these national challenges, with very limited acknowledgement of the value of adultsocial care either intrinsically, or in terms of its central role in supporting the National Health Service and wider economy.
“Nothing illustrated this more pertinently than the autumn Budget when it was announced that the Government would be halting long-term reform of the sector.”
Separately, responding to Wednesday’s Budget announcements, Care England described it as a missed opportunity “to reinforce this progress and move towards a sustainable funding settlement for the sector”.
Prof Green stated: “It was an opportunity that, unfortunately, the Government did not take, with a notable lack of any announcements targeted at the sector.”
He called for a “political consensus must be forged on how to fund and support our vital sector sustainably over the long term”.
