Last Updated on September 29, 2022

The Care Provider Alliance (CPA) has published a new report, which reflects on a number of care providers’ thoughts on the Fair Cost of Care process and lays out their key concerns.

Care England said the new report, ‘Provider Market Sustainability - Planning Support to Councils’ offers an opportunity for local authorities to recognise the pressures facing independent providers now and in the future.

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 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.

Professor Martin Green OBE, Chief Executive of Care England, said, ‘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.’

ICG Chair Mike Padgham said this latest evidence of a sector facing frightening challenges could not be ignored.

He said, ‘It is an excellent report by the CPA but makes very difficult reading. It does however give local councils vital ammunition to go to the Government and say, in realistic terms, what they need to deliver social care in the current economic climate.’

Adding, ‘We see time and time again evidence that the social care sector is in crisis and facing very real existential challenges that place the delivery of care to many thousands of older and vulnerable people in jeopardy. Here, the CPA very plainly and clearly shows that the level of staff vacancies, the struggle to recruit staff and the rocketing costs of energy, food and insurance, amongst other issues, are creating a very difficult playing field upon which to deliver good, sustainable care.

‘The Government cannot ignore these issues and hope they will go away.’

Visit the Care Provider Website to read the report in full.

In other news, new sector workforce research has revealed 43% of workers are considering a change due to the pressures of their current job. 16% are planning to leave the industry completely.