Care home budgets and the cost of compliance

Topics covered: Ridouts professional advice

Care home costs are increasingly rising due to the cost of complying with the latest guidelines and regulations. According to data released by business and support organisation, The Forum of Private Business, when compared to other small and medium-sized enterprises (SMES), costs for care businesses are averaging £21,250 which is £7000 more than other SMES.

Data from the ‘Kennedy report’ indicates that the cost of care home compliance is almost £521m, with £181m being spent on external consultants and expenditure is predicted to rise due to the increase in punitive budget measures and employment. This comes at a time when care homes are experiencing greater increases in general payroll costs than other sectors.

Managing director of The Forum, Ian Cass, said that: “the Kennedy report has shown that there is tension between compliance needs and care needs.” Highlighting the issues, he explained that: “We have become really worried that punishments for care home managers in particular will lead to a new slew of paperwork that cannot help with the care of their charges. Caring for the most vulnerable in the community should be one of the most rewarding jobs that a person could have, but the industry is beset by low pay/margins and an increasingly bureaucratic workload.”

It is also noted that the care home sector is in a different position to other industries, weighed down by industry specific compliances, with costs incurred from regulatory organisations such as CQC amounting to on average £5,880 per company. Other costs on average amount to £4,760 for health and safety, £5,500 for employment law and £5,800 for industry specific legislation and environmental compliance.

In an effort to move forwards and beyond, The Forum advices that there needs to be a ‘radical deregulation’, in order to allow care home providers to focus on the real issue in care homes – care.

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