Serious risk of widespread failure in adult social care without action, Government told

Ministers have been accused of either “ignoring or not caring” about serious needs within the adult social care sector despite a risk of “widespread failure” among providers.

A stark analysis sent to the Government by leading voices in the sector has warned high employment costs, too-low fee rates, and councils struggling to balance their books are all threatening its overall sustainability.

Collapses in social care provision could leave those in need without care, add to the responsibility on family carers, and increase pressure on NHS services, Care England and the Homecare Association said.

The former is one of the largest representative bodies for independent adult social care providers in England, while the latter has 2,200 members across the UK.

They said that contrary to some perceptions around social care and private provision, most adult care and support services are state-funded in England.

In a letter to Health Secretary Wes Streeting, Deputy Prime Minister Angela Rayner and Chancellor Rachel Reeves, they said: “The sector has reached a tipping point. Local authorities and providers are unanimous in their views on this.

“Without urgent action, we face the risk of widespread failure of many providers, particularly those serving the state-funded market.”

Their report on the state of the care market, by industry analysts LaingBuisson, concluded that up to 85% of care provision comes from small and medium-sized businesses, and that the majority of care services are state-funded.

They found this to be the case for 57% of care homes for older people, in 79% of homecare, 89% of care homes for younger adults, and 96% of supported living.

For the minority of providers in older people’s residential care and homecare with private-only clients, these tend to be in affluent areas of southern England, the analysis said.

They said budget deficits are “so severe that even big companies relying on government funding are struggling”, and that the fact larger providers are struggling means the plight of smaller businesses is “even more serious”.

The Government has repeatedly stated that it inherited a social care system “in crisis” but that it is determined to tackle the challenges and build a National Care Service.

But the letter authors said an immediate intervention from Government is needed in the form of at least £2.8 billion investment in the sector, a minimum price to be set to cover services in the form of a National Contract for Care services, and a multi-year funding settlement for social care to meet future demand.

They repeated a call for care providers to be exempted from changes to employer’s national insurance contributions (NICs).

Research published last month estimated local authorities providing social care in England could face extra costs of an estimated £1.8 billion as a result of a rise in NICs and wage bills for providers.

The letter stated: “Announcements made in the autumn Budget have caused deep fear among many who commission, provide and receive care and support services.

“The Government has chosen not to respond to representations made by the care and support sector. This suggests a lack of understanding of the sector or a lack of care about those affected. We offer this new and up-to-date evidence to help address the former.”

William Laing, chief executive of LaingBuisson, said their analysis, from statutory accounts of providers large enough to post profit and loss, “show providers supporting the state-funded market are struggling”.

Jane Townson, chief executive of the Homecare Association, said: “We risk a significant reduction in care and support services.

“This could leave thousands of older and disabled people without essential support; force family members to quit their jobs to provide care; and increase NHS waiting lists.

“Local authorities and providers agree we are at a tipping point and need immediate Government intervention.”

Care England chief executive Professor Martin Green (pictured) said: “The Government is ignoring or not caring about the serious harm their policies are causing.

“When care providers fail, it’s not just businesses that collapse. It’s entire support systems for people needing and receiving services. The human and economic cost will be devastating.”

David Fothergill, social care spokesman for the Local Government Association, said councils are facing “unprecedented financial challenges” which are “putting vital services at significant risk of collapse”.

He added: “Adult social care, which supports millions of people to live with dignity, is particularly exposed, with rising costs threatening provider failures, longer waits for care, and growing unmet needs.

“Councils are reporting the likelihood of further cuts to core services and severe strain on health and care systems, including redundancies and providers handing back contracts.”

A Department of Health and Social Care spokesman said: “We are tackling the challenges facing adult social care and taking the first steps towards building a National Care Service by introducing legislation that will establish the first ever Fair Pay Agreement for care professionals and increasing the Carer’s Allowance earnings threshold by over £2,300 – the biggest rise since the 1970s.

“We are giving local authorities an additional £3.5 billion in 2025-26, including a £680 million increase in the social care grant to support the sector.

“Ensuring there is a stable economy is one of the foundations of our plan for change, which will deliver stability, growth and investment for communities across the UK.”

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