Embargoed until 00:01 11 December 2024
The UK risks widespread failure of care provision. This could leave people without care; overwhelm family carers; and cripple NHS services.
A new care market report by LaingBuisson, leading industry analysts, reveals a sector in a precarious financial state. Rising costs from Autumn Budget measures are threatening the viability of many providers. Providers serving the state-funded market are most at risk.
Contrary to some perceptions, private equity controls just over 10% of social care capacity overall. Small, local providers comprise 80-85% of the sector. They operate on thin margins, lack financial resilience and are very vulnerable. Data show that larger state-funded providers, too, may struggle to remain afloat.
Dr Jane Townson OBE, Chief Executive of the Homecare Association, said,
“We risk a significant reduction in care and support services. This could leave thousands of older and disabled people without essential support; force family members to quit their jobs to provide care; and increase NHS waiting lists. Local authorities and providers agree we are at a tipping point and need immediate government intervention.”
The analysis reveals several critical factors threatening sector sustainability:
- Local authorities and the NHS buy 70-80% of all care services. The fee rates they pay now are too low to cover costs.
- Employment costs, representing 70-80% of providers' total costs, will surge by at least 10% in 2025-26. This is driven by increases in employers' national insurance contributions and minimum wage requirements.
- Providers cannot pass on these increased costs as local authorities and NHS bodies, their primary customers, fix prices. Many councils cannot balance their books and directors of Adult Social Services must cut budgets by £1.4 billion.
Professor Martin Green OBE, Chief Executive of Care England, said:
“The government is ignoring or not caring about the serious harm their policies are causing. When care providers fail, it's not just businesses that collapse. It's entire support systems for people needing and receiving services. The human and economic cost will be devastating."
William Laing, Chief Executive of LaingBuisson said,
"Our data are from the statutory accounts of providers large enough to post profit and loss. These show providers supporting the statefunded market are struggling. SMEs face an even more challenging situation."
We call on the government to:
- Invest at least £2.8 billion in the care sector to mitigate these risks. Evidence shows that every £1 invested saves £3 in longer-term costs across the health and care system.
- Exempt care providers from changes to employer's national insurance contributions.
- Ensure a multi-year funding settlement for social care to meet future demand and cover the full cost of care (estimated £18.4 billion needed by 2032/33)
- Implement a National Contract for Care service that sets a minimum price for care services. This will ensure public sector commissioners pay the full cost of quality care.
We have also written a letter to the Chancellor, Deputy Prime Minister and Secretary of State for Health and Social Care, about the serious risks to the sustainability of care and support services in the UK.
[ENDS]
Contacts
Dr Jane Townson OBE, Homecare Association
Email: [email protected]
Mobile: 07435910654
Antonella Corby, Care England
Email: [email protected]
Tel: (020) 7492 4843
Notes to editors
1. The Homecare Association is the UK’s membership body for homecare providers, with over 2,200 members nationally. Its mission is to ensure homecare receives the investment it deserves, so all of us can live well at home and flourish win our communities. The Homecare Association acts as a trusted voice, taking a lead in shaping homecare, in collaboration with partners across the care sector. It also provides hands-on support and practical tools for its members. The Homecare Association's members agree to abide by the Association's Code of Practice.
2. Care England, a registered charity, is one of the largest and most diverse representative bodies for independent adult social care providers in England. Care England members provide a variety of care services, amongst them single care homes, small local groups, national providers and not-for-profit voluntary organisations and associations, as well as private providers, for a variety of service users including older people, those with long-term conditions, learning disabilities and mental health problems. Of our membership, broadly, 60% of care providers provide care to older adults, whilst 40% provide care to younger adults, namely individuals with a learning disability and autistic people. Our members run and manage approximately 4,000 care services and provide over 120,000 beds. Care England’s mission brief is to serve as a unified voice for our members and the care sector aimed at supporting a united, quality-conscious, independent sector that offers real choice and value for money.
3. The Homecare Association and Care England commissioned this report from independent market intelligence analysts, LaingBuisson.
4. William Laing founded LaingBuisson with Agnes Buisson-Laing over 30 years ago. The company has been serving clients with insights, analysis and data on market structures, policy and strategy across healthcare, social care and education ever since. Today it is a leading business intelligence provider built around its data capabilities. Many years of survey data, often with valuable time series, insights from consulting projects, long term relationships with providers, governments and regulators and accumulated experience have created a unique repository of knowledge. LaingBuisson is the chosen provider of independent sector healthcare market data to the UK Government’s Office for National Statistics.
