David Kingman looks at the findings of a recent report which suggest that the system of providing care for elderly people in their own homes is heading for financial crisis
The state-funded system for assisting elderly people with tasks such as washing, cooking and cleaning in their own homes is facing a dramatic funding crisis, according to a new report by industry body the UK Home Care Association. By comparing the rates which local authorities across England pay providers for these services with the actual cost of providing them, they argue that there is a rapidly growing funding gap which has now reached £513 million.
“Unfair” rates
The UK Home Care Association’s report argues that the government has created a rod for the industry’s back by imposing the new National Living Wage on care employers while simultaneously reducing the level of central government grant which most councils receive as part of its austerity agenda, resulting in a growing shortfall between rising overheads and falling local authority budgets for funding social care. This, they argue, has imperilled the financial sustainability of many care providers.
The care providers that belong to the UK Home Care Association between them look after almost 900,000 people, of whom around 80% receive some degree of financial support from their local authority. The industry body argues that the typical cost for providing an hour’s home care services across the UK is £16.70 – an estimate which factors in the provider’s costs and includes a 50p profit – but that their survey (which involved sending Freedom of Information requests to councils) showed that the weighted average price paid by councils was just £14.58 across the country.
The rates which local authorities negotiate with care providers for their services have fallen dramatically in recent years, as councils have grappled with severe funding restrictions which have been imposed on them since 2010 by the central government’s austerity agenda. This has led to dramatic variations in the amount that different councils will pay for care: while most councils are paying less than the rate which the UK Home Care Association argues is sustainable, the seven lowest-paying ones are only funding home care to the tune of £11.94 per hour, which the Association argues is too low to maintain care providers as viable businesses.
As they say in their report: “Without addressing this underfunding, the independent and voluntary sector will continue to struggle to recruit and retain careworkers with the right values, training and qualifications. Ultimately, the care market will become economically unsustainable, with a consequent inability for the state to enable older and disabled people to live independently at home.”
Crisis point?
The problems that this report has highlighted in a specific section of the care industry chime with the broader assessment recently published by the national Care Quality Commission, which warned the sector was at “tipping point” because of rising demand for services, staff shortages and cuts to funding. Subsequently, there have been renewed calls from experts for the Chancellor, Philip Hammond, to provide additional funding for health and social care in his Autumn Statement in a few weeks’ time.
So far, the government has pinned its hopes of solving these problems on the Better Care Fund, an initiative which is designed to enable a greater pooling of resources between the health and social care systems in order to reduce the pressures facing the former, but work on integration is still in its infancy compared to the scale of the challenge.
The flaws in the current social care system don’t only affect older people: they impose huge costs in time and anxiety on their younger relatives who have to try and negotiate it on their behalf, to say nothing of the unpaid care work which more and more family members are having to deliver following the cutbacks in state support. Unfortunately, a solution to the care crisis which is both fair to all generations and financially sustainable remains tantalisingly out of reach.