Last Updated on March 21, 2017

New analysis from the Local Government Information Unit (LGiU) and Mears has found that the current homecare market is on the brink of collapse.

Following on from research conducted by Opus Restructuring and Company Watch for BBC1's Panorama programme, which identified that over a quarter of UK homecare providers are at risk of insolvency, Paying for it looks at the human and emotional costs of the homecare market with stories from across the care system.

It outlines why care is priced so low and how people in the system end up paying for cut-price care. It says that these systemic problems make provider failure more likely and leave the most vulnerable in an even more precarious position.

In his Spring Budget, the Chancellor announced £2bn of funding for social care over the next three years, along with a Green Paper on long-term financing to address rising care demands. Paying for it outlines the need for a much wider systemic shift in the way homecare is commissioned and delivered – from a time and task approach to one that is focused on outcomes and results.

Some councils are already trying new ways of commissioning, such as flexible banks of care hours or other methods to re-focus care commissioning on outcomes. Kingston Council, for example, is working in partnership with LGiU and others to develop an app to support outcomes measurement. However, the research found that only around one in ten councils are making real strides toward achieving outcomes-based commissioning. And, fewer than a third of councils are routinely monitoring changes to individuals' social care needs and health conditions.

With the pace of provider failure accelerating, the report outlines the need for urgent action from the Government and local authorities on funding and commissioning mechanisms.

Key recommendations from the report, include:

• Councils should look carefully at the impact of reductions to their hourly rate.
• Councils should require (and make full use of) open-book accounting arrangements with their providers.
• Councils should consider how they incentivise outcome-based commissioning. 
• Central government must urgently review the mechanism for funding adult social care and plug the immediate financial gap.
• Central government must review longer terms solutions to social care that are not solely focused on funding.

Jonathan Carr-West, Chief Executive of LGiU, said, 'The current homecare system serves no-one well. Hospitals are short of beds because the frail cannot be discharged. Care workers are undervalued and underpaid. People who need care do not always get the care they need when they need it. Local authorities that commission care are having their budgets slashed so mercilessly that they are faced with a stark choice: ration care further or pay for care at a rate so low that care businesses will limp along until they can go no further.

'This is a systemic crisis. It has been caused by a system which over specifies times and actions at the cost of goals and outcomes. Too often, the system has been about procurement, rather than partnership.

'We can no longer tinker around with small changes to commissioning or small uplifts in budgets or the price of care. We need radical reform in the way that we pay for and purchase care.'

Alan Long, Executive Director of Mears said, 'I welcome the recommendations in this report. It comes at a time when there is both growing awareness of problems in the market and the opportunity to address some of them through the forthcoming Green Paper. When the system no longer serves anyone well, it is past time to make a serious reflection on why and how we can fix it. Although much of this comes down to money, it is not simply about money, but about wider approaches to commissioning and a lack of transparency in accounting for costs and outcomes.

'As a homecare provider, we will play our part in improving the service we deliver, helping join up services and making a career as a homecare worker more aspirational than it is today. We very much hope that we don’t have to give up any more care contracts due to unsustainable rates, but our first priority will be to only work in areas where we have a chance of delivering the kind of service experience, that we all want and need.'