A quarter of the UK’s 2,500 home care providers are at risk of insolvency and almost 70 have closed down in the last three months, an investigation has found.
BBC Panorama discovered 95 councils have also had home care contracts cancelled by private companies, as a nationwide shortage of home-care workers puts the sector on the brink of collapse.
The programme found that agencies were struggling to deliver the care required with the funding offered, forcing the companies to end their contracts.
The agencies – which provide help for people living independently at home – also struggled to recruit and retain staff.
One home care company – Cymorth Llaw in Bangor, Wales – was forced to hand back its contract with Conwy council because it felt unable to provide adequate care with the council’s funding offer of £15 per hour.
Ken Hogg, co-director of the company, told the programme: “We didn’t think we could do it for the money – it was as simple as that.”
He said the company has always paid employees above the national minimum and living wage. But with pension contributions, National Insurance and training – among other costs such as mileage and travel time – the amount the council were paying “doesn’t leave a great deal”.
The show also found a similar issue at home care company Mears, who cancelled a contract with Liverpool City Council in July saying £13.10 per hour was not enough to cover the costs, and at least £15 an hour was needed.
Alan Long, executive director at Mears, told the programme: “That was a terrible thing to do for both service users and for care staff, we absolutely did not take that lightly, but frankly what choice did we have?”
The Local Government Association warned in January that the number of people who had “unmet basic needs”, such as getting washed, dressed or getting out of bed, could rise because of “continued underfunding” of social care. It said those who got care could face shorter visits from carers.
A separate analysis from the Local Government Information Unit (LGiU) think tank and Mears, which provides social care, warned that the home care market is on the brink of collapse.
In this month’s Budget, chancellor Philip Hammond announced £2 billion of extra funding for social care over the next three years, and said the system was “clearly under pressure”. However, the money was due to be funded by the rise in National Insurance contributions by the self-employed, which the government has backtracked on.
Barbara Keeley MP, Labour’s Shadow Cabinet Minister for Social Care, said: “The funding in the Budget for social care was only half what was needed for this year.
“It’s time the Government gave social care the money it needs and develops a fair, long-term funding solution to provide sufficient good quality and dignified care for those who need it.”
A Department of Health spokeswoman said: “Older and vulnerable people must get compassionate care, which is why we have provided councils with £9.25 billion of dedicated funding, including an extra £1 billion in 2017/18 to provide immediate relief.
“We will bring forward proposals later this year to ensure a more financially sustainable social care system. We particularly want to address variation in standards through targeted support for local areas that are struggling.”
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