More than a quarter of UK domiciliary care providers are at risk of going out of business, a new study suggests.
Research by business analysts for BBC Radio 4’s You and Yours programme found that 715 of the 2,731 home care operators in the UK are in danger of closure.
The sector has combined debts in excess of £100m, the study found.
Business risk adviser Nick Hood, from Opus Business Services, told the programme that the coronavirus crisis has added to the financial pressures on the already stretched social care sector.
“These companies have been struggling for years and now this hits them. They need to be resilient to come out the other side, and when you look at their finances – the one thing they don’t have is resilience,” he said.
“The merest puff of adverse financial wind will blow them away. Coronavirus might be that puff of wind.”
Dr Jane Townson, the CEO of United Kingdom Homecare Association, has previously warned of “mass insolvencies” in the sector.
She said that costs incurred by home care providers due to the coronavirus pandemic equate to an extra £3.95 per hour of home care delivered, but many councils are failing to pay care providers enough to even cover the rise of the National Living Wage (NLW) that came into effect on April 1.
Key drivers of rising costs related to COVID-19 are PPE and staffing – sick pay and over time – with extra costs including transport, training, remote working and IT being “collectively significant”, Dr Townson warned.
Last month, the CEO called for a clear strategy for home care as part of a potential 10-year plan for the social care sector.
Colin Angel, UKHCA policy director, told the BBC: “We’re still not seeing councils recognising the true cost of care, and until that happens and they are adequately funded by central government, we’ll continue to see some home care businesses winding up and closing their doors.”
The Association of Directors of Adult Social Services (ADASS) has recently called for “significant additional funding” for the home care sector following the publication of the government’s Winter Plan.
The Department of Health and Social Care said the Adult Social Care Winter Plan, published in September, will aim to curb the spread of COVID-19 infections across all care settings.
But ADASS says the document is heavily focused on safety and wellbeing in care homes, and there is more work to be done to protect those providing and receiving care at home.
A Department of Health and Social Care spokesperson said: “The government has made £4.6bn available to local authorities so they can address the pressures on local services caused by the COVID-19 pandemic.”