Care home insolvencies show ‘crisis’ in social care

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THE GOVERNMENT has been urged to tackle a “growing crisis” in social care after the number of care home businesses going bust leapt by over 80 per cent in a year.

Accountancy firm Moore Stephens said cuts in local authority funding were a “significant cause” in the rise in firms entering insolvency - up 83 per cent from 81 in 2016/17 to 148 in 2017/18.

The Independent Care Group said the figures were evidence of the growing crisis in social care.

Chair Mike Padgham said: “These figures come as no surprise, we have been warning for years that the £6bn cut from social care would eventually see more and more care homes closing – and here we have the evidence.

“However, the statistics only tell half the story. For every home closure there are older and vulnerable people either forced to find somewhere else to live or unable to have a place because the number of homes is on the decline.

“Some 1.2m people in this country are now going without the care they need - this is our mothers, our fathers, aunts and uncles – and unless action is taken this will very soon be us.

“We now face a further £2.3bn funding shortfall and that is going to mean more and more people not getting the care they need.

“The Government has to act on the crisis in social care – even if it means we have to better fund care through taxation. Otherwise, we are going to see more and more statistics like those issued today.

“It is shortsighted not to support social care. A hospital bed costs far more than a care bed – so investment in social care saves the NHS money.”

The latest estimates from the Care Quality Commission show that since 2013, the net number of care homes has fallen by 1,239 – 3,283 homes having left the market and only 2,044 having entered it.

Group chief executive of Springfield Healthcare Group, the company behind the new £10m Chocolate Works care village in the former headquarters of Terry’s chocolate factory in York, told The Yorkshire Post the care sector had been hit by “a decade of under-funding” by local authorities paying low rates for care home fees.

That had hit long-standing homes based in converted properties that were facing the need for major investment for infrastructure projects.

“This has finally come to a head,” he said. “However, it is easy to blame the lack of funding, but the picture is more complex. Banks are becoming more discerning on what they will fund, favouring modern, new builds over conversion properties that have been solid businesses for 30 to 40 years but are facing refurbishment costs.

“Local authorities in parts of Yorkshire are starting to pay better fees, but there has been a systematic erosion of margins in the care home industry over recent years.”

A spokesperson for the Department of Health and Social Care said: “We know the social care system is under pressure — that’s why we’ve provided an extra £2 billion funding to the sector and recently announced a further £150 million for the next year. We will shortly outline the Government’s plans to reform social care to ensure it is sustainable for the future.”

Green Paper set to outline reform

THE GOVERNMENT will set out its proposals to improve social care and tackle the challenges of an ageing population in a Green Paper published this summer.

Last month, Health and Social Care Secretary Jeremy Hunt outlined the “key principles” that would frame social care reform - quality; integrated care; control to those being giving support; a respected and valued workforce; support for families and carers; a sustainable funding model; and greater security for all regardless of need. He said the path to a long-term settlement for social care had been “long and arduous” and warned of “further twists and turns”, but pledged to create a care and support system that “everyone - whatever their age - can be confident in.