The financial pressures crippling the social care sector could start to directly impact the vulnerable adults it supports, according to a newly published report, which shows the number of providers handing back contracts in the past 12 months has more than doubled.

Independent research commissioned by Hft, a national charity supporting adults with learning disabilities, found that in 2018 more than half (59%) of providers had been forced to close down some parts of their organisation or hand back contracts to local authorities as a means of dealing with cost pressures. Worryingly, 68% envisaged having to do the same “in the near future” while 11% foresaw a reduction in the quality of care if their financial situation did not improve. This would suggest that vulnerable adults supported by the sector may soon start to be directly affected by the funding pressures.

New Hft report is a red flag for the future of social care
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The survey also found that recruitment remains a challenge with 80% of providers reporting low wages as the biggest barrier to recruiting and retaining staff. In the last year, the number of providers citing the increased cost of agency workers as one of the main cost pressures facing their organisation has rocketed from 13% to 63%. It comes second only to rising wage bills – as providers struggle to fill staff vacancies, in turn affecting the continuity of support they are able to provide.

The research is Hft’s second annual Sector Pulse Check report, carried out by independent economics and business consultancy Cebr, and is the first of its kind to focus primarily on learning disability providers. Based on survey analysis from social care providers, it provides an annual snapshot of the financial health of the social care sector over the past year and an indication of how providers anticipate the next twelve months will progress.

The report also highlighted that:

  • In response to the ongoing recruitment challenge more than three-quarters (78%) of providers have increased the amount of resource they allocated to their recruitment efforts over the past year, with two-thirds (67%) of these running a dedicated recruitment campaign to help reduce staff vacancies.
  • Only 4% of providers have completed their preparations for Brexit, while a further 28% have either not yet started or were less prepared than last year.
  • There is a lack of confidence in the government to resolve the sleep-in crisis with the majority of the sector (72%) stating they did not believe that this year would see a decisive end to the issue.

Billy Davis, Public Affairs and Policy Manager for Hft said:

“This year’s sector pulse check is a red flag for the future of social care. With repeated calls for a sustainable funding solution going unheeded, we are now seeing the true cost of government inaction on providers.

“More than half of providers have reported needing to hand back financially unsustainable contracts in the past year. This is culturally at odds with how many providers in the sector operate, particularly with individuals who may have been supported by a provider for much of their adult lives.

“68% of providers are also warning that they will need to hand back further contracts in the near future. It is deeply worrying, if not surprising, that our report concludes that, for the first time, providers are warning that it will not be long before these financial pressures may soon start to be felt by those vulnerable adults supported by the sector, as disruptions to the continuity of care they receive becomes more commonplace.

“The underfunding of social care is a national crisis that requires a national solution. With the green paper on social care now long overdue, we call on the government to urgently address the issues facing the sector, before it affects some of the most vulnerable adults in our society.”

Pablo Shah, Economist at Cebr said:

“The results of the latest survey highlight that cost pressures are intensifying for the UK’s care providers, with nearly a third of organisations that are not already running a deficit expecting to do so within the next two years. Recruitment remains an ongoing challenge for the social care sector, as care providers are struggling to meet their employees’ wage expectations given increasing funding pressures.”

Hft is now calling for the Department for Health and Social Care to published its long overdue Green Paper on social care as a matter of urgency and not allow this critical issue to be sidelined by the ongoing Brexit debate.

Commenting on the report VODG chief executive Dr Rhidian Hughes said:

“People with a learning disability rely on the state to pay for essential care services and this new report puts the spotlight firmly on government and its failure to adequately fund the sector. Local commissioning is not keeping pace with the rising costs of care provision, investment in the sector is being seriously eroded and the sustainability of future services is now under real threat. This situation is not fair to the individuals and families who rely on care services, nor the workforce, and the government must take steps to immediately shore up the sector.”

The report confirms the sector’s limited preparedness is dealing with the UK’s exit from the EU. Only four per cent of organisations in the study had completed their preparations for the EU exit.

“With the ongoing uncertainty over the UK’s exit from the EU, the limited preparedness in dealing with Brexit is a major source of concern. Brexit exacerbates the threat to social care because the likely economic impact may lead to less public funding and potentially create instability in the sector’s labour market. The government needs to step forward and actively plan with the sector to ensure that essential care and support services are not put at risk.”