Social Care braced for ‘Perfect Storm’ amidst rising costs

On 19 April 2022, a new report published by the disability charity HFT called ‘Annual Sector Pulse Check’ (“The Report”), highlighted the current financial problems which the learning disability social care sector faces. Care providers are struggling financially, with 71% reporting that they are in a deficit, with costs currently exceeding their current levels of funding, or reporting that their surplus has decreased. This has risen significantly from 56% in 2020.

What are the challenges faced by social care providers?

The Report has cited rising wage bills as one of the main challenges facing care providers. There have been increases in the national living wage and as a result care providers are struggling to deal with these increased costs. It was reported that 80% of providers said that the fees paid by local authorities will not cover their increased costs relating to wages.

In addition to the financial difficulties that the sector is experiencing, the sector has also struggled to both attract and retain staff. This is demonstrated by the average staff vacancy rate increasing by 10% from the previous year’s levels. Almost all providers surveyed in The Report cited high vacancy rates as an increasing problem. Additionally, the overall average staff turnover rate was 20%, with one in five new starters leaving the social care sector within the first 12 months of starting a role.

As a result of these staffing issues, almost three quarters of providers surveyed had to turn down new admissions, and over a third had to close down services. The current rising costs in relation to the cost of living and utility bills are also having a significant impact on providers who are struggling. This is demonstrated by the number of providers who have citied utility bills doubling in the last year as a main cost pressure. Consequently, half of the providers surveyed by HFT, have declared that they have had to utilise their cash reserves. 43% of providers had to partially close parts of their service.

What will happen next?

As a result of all of the pressures faced by the learning disability sector, the charity HFT is just one of the 20 learning disability care providers who have collectively joined in publishing a joint letter to the Government. This joint letter is urgently calling for the Government to redirect additional funds from the Health and Social Care Levy into social care. HFT believe this will ensure that there is sufficient funding to cover wages which will reflect the real-term cost of living and hopefully attract more individuals to work in the sector and remain there. Kirsty Matthews, CEO of HFT, said:

“To ensure that care staff are paid a salary commensurate with the responsibility of the job, and to alleviate the recruitment and retention crisis in the sector, it is vital that additional funds are drawn down from the Levy this year.”

One of the recommendations made in The Report, is to ensure that local authorities are able to cover the cost of care they commission, which includes the rises in the National Living Wage and other costs providers have to now consider, such as increases in energy bills.




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