A new report by the Homecare Association (HA) has highlighted the risks associated with low fees paid by councils and the NHS to UK care providers. The research suggests that the money paid to companies by public bodies does not cover the costs of minimum wages, training, travel costs, regulation and insurance. In fact, only 14 out of the 276 councils and NHS bodies surveyed paid fees which allowed companies to cover wages and other business costs. The research indicated that one in 20 authorities paid enough to fund minimum wage and other staff costs. This means that some companies have struggled to find staff to support those with complex needs, whilst others have gone under.
The funding gap is likely to widen with a third of councils in England expected to make additional cuts to care services over the next few months. The HA calculates that an hourly rate of £25.95 should be paid to cover minimum wage, travel costs, training, administration, regulation and insurance, with roughly £1 for profit. In contrast, the average hourly rate paid by public bodies across the UK was found to be £21.56, with £16.04 the lowest hourly rate paid in Ealing Council in London. Staff shortages within the sector, with over 150,000 vacancies in social care in England alone, is also influenced by low pay.
According to HA chief executive, Jane Townson, councils and NHS bodies are “driving down fee rates; driving down wages [and] driving down quality,” adding that “quality care, a strong workforce, and sustainable services cannot be delivered cheaply.” Social affairs editor for the BBC, Alison Holt, reports that care companies are being forced to take on more private clients to balance their books, but warns it is becoming harder for them to stay financially viable, which threatens the quality of care for those least able to pay.
The Association of Directors of Adult Social Services (ADASS) reports finding “really tough” decision-making amongst council care bosses in its latest survey. A third of senior managers had been asked to make cuts of £83.7m over the next few months, in addition to £806m of savings already completed this year. ADASS President, Beverley Tarka, said: “Social care leaders and their teams are struggling to find savings and meet people’s needs at least minimally,” adding that “they can’t perform miracles from already overstretched budgets.”
The HA has now called for it to become illegal for public bodies to purchase services at fees which contravene employment and care regulations concerning wages and training
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