An opportunity to secure sustainability

Care England, the largest and most diverse representative body for independent providers of adult social care in England, has welcomed the Care Provider Alliance publication ‘Provider Market Sustainability – Planning Support to Councils’ as an opportunity for Local Authorities to recognise the pressures facing independent providers now and in the future.

Professor Martin Green OBE, Chief Executive of Care England, says:
“This report evidences the significant pressures care providers are currently operating under. It is now incumbent upon Local Authorities to recognise these pressures in their Market Sustainability Plans due to be submitted to the Department of Health and Social Care on 14 October, to reflect the current and future reality of the sector to sustain the workforce and financial viability, whilst also to address the impact of rising energy and agency costs, as well as rising inflation.”

Provider Market Sustainability – Planning Support to Councils reflects a number of care providers’ thoughts on the Fair Cost of Care process and lays out their key concerns.

The Fair Cost of Care exercise is a process of engagement between local authorities, commissioners, and providers, data collection, and analysis by means of which local authorities and care providers can arrive at a shared understanding of the local cost of providing care. The cost of care exercise is aimed at helping local authorities identify the lower quartile, median, and upper quartile costs in the local area for a series of care categories.

The Care Provider Alliance (CPA) was tasked by provider members to produce this document for councils to consider ahead of finalising their Market Sustainability Plans.

Alongside Cost of Care exercises, local authorities are required to develop and submit a provisional Market Sustainability Plan, which will be followed by a final Market Sustainability Plan when local government budgets for 2023 to 2024 have been confirmed.

The key concerns for providers detailed within the CPA publication were workforce, energy, inflation, and Return of Operations/Capital:

  • Vacancies are up 52% in the last 12 months against a 48-year low in unemployment
  • 60% of providers will need to uplift carer pay in addition to their annual pay uplift, due to the cost-of-living crisis
  • 88% of providers struggle to secure agency staff
    • 50% of agency staff used to cover long-term vacancies
    • 26% cover short-term vacancies and is additional to the staff costs they are covering
  • Recruitment costs are up 127% in the last 2 years
  • Overseas recruitment costs £3-5k per annum and in some locations, accommodation is unable to be sought
  • Even after the introduction of the Energy Bill Relief Scheme and the introduction of a cap, energy prices for providers are 3-4 times what it was 12 months ago
  • Food inflation is over 15% of total costs currently for care home providers
  • Insurance premiums can be 400% higher than pre-pandemic levels
  • Councils do not apply sufficient Return on Operations or Capital levels to sustain providers who need to maintain a profit/ surplus to invest in their organisations and to stay in business

Martin Green continues: 
“The Fair Cost of Care exercise was engaged with by around 32% of care homes, equating to 41% of care homes places in England. With such a significant representation of data, Local Authorities now have the evidence they require to secure the future sustainability of the sector. There is no room for further excuses. The Market Sustainability Plans must focus on the solutions required to address local issues around workforce pay and benefits, as well as address the provision of funding for providers.”