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‘Major risks’ warning as state-funded homecare faces £500m shortfall

Social care providers are not being paid enough by councils to stay in business, with state-funded homecare for the elderly facing a £513m funding gap, according to a new report from the United Kingdom Home Care Association (UKHCA).

FOIs by UKHCA found just 10% of 208 British councils were paying their local providers an average price of £16.70 an hour. The association estimates this is the minimum amount necessary to comply with national minimum wage regulations, including careworkers’ travel, and the costs of running the service in a sustainable way.

In total, it is estimated that UK homecare is £513m in deficit. The average rate paid for homecare was just £14.58 an hour, and seven authorities had an average price below £11.94, the minimum rate needed to cover the direct costs of employing homecare workers.

Colin Angel, UKHCA’s policy director, said: “Councils which decide to pay inadequate rates for homecare are taking major risks with people's wellbeing and the jobs of local people who provide care.

“People who use homecare services are already experiencing the consequences of unstable care markets.”

UKHCA also accused councils of making “empty promises” over the living wage after finding that just three (Oxfordshire, Wiltshire and Bath and North East Somerset) paid a price which could allow providers to pay the wage. None of the London borough councils met the London Living Wage.

The report said that if councils demand providers follow the living wage but do not give them the means to do so, they could be forced to cut funding for training and care co-ordination to increase wages, or else see their finances collapse.

It recommended that all local authorities carry out a transparent costing exercise for care in their area, after finding that just 24 of the responding councils knew how much they should be paying.

Recently, the CQC’s latest annual report warned that social care is approaching a “tipping point”, with more providers expected to fail in the future.

UKHCA called on councils to pay a rate “consistent with sustainable costs”, and work with it and member organisations to understand the implications of under-funded homecare services.

In addition, it said governments of all four UK administrations should require statutory regulators to undertake effective oversight of the commissioning functions of councils and trusts.

Cllr Izzi Seccombe, chair of the LGA’s community wellbeing board, said financial pressures on the care provider market could be at least £1.3bn, and could reach £2.6bn by 2019-20.

“Councils, care providers, charities and the NHS are all united around the need for central government to fully fund adult social care,” she said. “This is essential if we are to move away from just trying to keep people alive to ensuring they can live independent, fulfilling lives, as well as alleviating the pressure on the NHS.

“The care provider market cannot carry on as it is and there is a real danger of more widespread market failure. Either care is properly funded or providers will pull out of council contracts or in worst case scenario go bust. The market for publicly-funded care is simply not sustainable as it stands.”

A Department of Health spokesperson said the government was “significantly increasing” social care funding and that councils “must be able to demonstrate that their care providers pay staff the minimum wage”.

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