The chief executive of United Kingdom Homecare Association (UKHCA) has warned that there will be “mass insolvencies” in the sector if local authorities fail to release extra funding.
Dr Jane Townson issued the warning as care providers across the country face higher costs in increasing staffing levels due to absences amid the coronavirus pandemic.
There are also cost implications in terms of equipment used in providing care during the crisis, and many care providers need extra financial support to overcome a drop in revenue as clients temporarily cancel their care visits.
New data collected by UKHCA from 81 councils shows that around 60% had failed to increase their funding to even cover the rise of the National Living Wage that came into effect last week.
“If no money is forthcoming there are going to be mass insolvencies, many are worried they are not going to make the April payroll. Some providers could go out of business this month,” Dr Townson told the Independent.
“This crisis is enough to send many providers over the edge, but some councils are acting like it is business as usual and not releasing emergency funds. We need the money now.
“The localised nature of the sector could cost lives unnecessarily.”
Last month, the government made £2.9bn available to support adult social care services in caring for the vulnerable and to free-up 15,000 hospital beds during the coronavirus outbreak.
But providers have been told by some councils that this money will not reach the front line.
Birmingham City Council said it would not offer providers extra financial support and Dorset Council told companies it was “business as usual”, reports the Independent.
In November, UKHCA slammed Walsall Council for not going far enough in increasing its home care pay rates following talks with providers and a written warning from the national body.
The organisation calculated that the council was paying providers just £14.33 per hour for home care, £4.60 below its Minimum Price for Homecare, which was set at £18.93 at the time.
Council bosses agreed to increase its hourly rate to £14.88, but according one provider caring for vulnerable adults in Walsall, the council has only increased this rate by £1 since April.
Care2U Tweeted: “Nothing’s changed – £1 uplift from April. Carers deserve better, especially now.”
UKHCA’s current Minimum Price for Homecare stands at £20.69 per hour, effective from April 1, when the UK’s statutory National Minimum Wage and National Living Wage increased to £8.20 – for 21 to 24-year-olds – and £8.72 per hour respectively.
This represents an increase of £1.76 on last year’s rate of £18.93 and is calculated based on the assumption that all care workers receive at least the NLW, among other factors.
UKHCA said the minimum price, which is widely recognised in the social care and health sectors, covers the minimum legally compliant pay rate for care workers (excluding enhancements for unsocial hours working), their travel time, mileage and wage-ralated on-costs.
It also includes the minimum contribution towards the costs of running a care business at a financially sustainable level.
Announcing the new price in January, UKHCA policy director, Colin Angel, said councils and the NHS must recognise the true costs of home care.
“Paying providers fees which in some cases barely cover the costs of the wage-bill continues to destabilise an already fragile state-funded market,” he added.