ONE in six care homes are showing signs that they are at risk of failure amid rising costs and lack of funding, a new study shows.
Research by accountancy firm Moore Stephens found that a “persistent” lack of funds from local authorities, coupled with increases to the national living wage had put considerable financial pressure on the sector.
The growing use of agency workers because of problems recruiting and retaining employees has pushed up staff costs to an all time high, said the report.
Lee Causer, of Moore Stephens, said: “Too many businesses in the care home sector are heading back to the brink.
“The mixture of rising costs, cuts in funding and an aging population has created a volatile situation, with many companies now showing signs of significant financial stress.
“Due to the aging population, extra staff are needed at care homes in order to keep up with the demand, but many care homes just don’t have the budget for extra staff.”
Shadow social care minister Barbara Keeley said: “Tory ministers have repeatedly ignored warnings that under-funding is causing a crisis in the care sector and now one in six care homes are under threat. This lack of funding damages the quality and safety of care and makes the care sector fragile and more prone to risk of failure.”