The number of social care providers handing back contracts to councils has more than doubled in the past 12 months, new research has revealed.
A study by Hft, a charity supporting people with learning disabilities, found that 59% of providers had been forced to close down some parts of their organisations or hand back contracts as a means of dealing with cost pressures.
Worryingly, 68% envisaged having to do the same “in the near future” while 11% foresaw a reduction in the quality of care if their financial situation did not improve.
The Sector Pulse Check report also found that 80% of providers cite low pay as the reason why they struggle to recruit and retain staff.
In the last year, the number of providers blaming the increased cost of agency workers as one of the main cost pressures facing their organisation, has rocketed from 13% to 63%.
It comes second only to rising wage bills – as providers struggle to fill staff vacancies, in turn affecting the continuity of support they are able to provide.
Billy Davis, Public Affairs and Policy Manager for Hft said the report is a “red flag” for the future of social care.
“With repeated calls for a sustainable funding solution going unheeded, we are now seeing the true cost of government inaction on providers,” he added.
“More than half of providers have reported needing to hand back financially unsustainable contracts in the past year. This is culturally at odds with how many providers in the sector operate, particularly with individuals who may have been supported by a provider for much of their adult lives.
“The underfunding of social care is a national crisis that requires a national solution. With the green paper on social care now long overdue, we call on the government to urgently address the issues facing the sector, before it affects some of the most vulnerable adults in our society.”
Pablo Shah, Economist at the Centre for Economics and Business Research said: “The results of the latest survey highlight that cost pressures are intensifying for the UK’s care providers, with nearly a third of organisations that are not already running a deficit expecting to do so within the next two years. Recruitment remains an ongoing challenge for the social care sector, as care providers are struggling to meet their employees’ wage expectations given increasing funding pressures.”