November 24, 2016

Autumn Statement: Will the social care crisis be averted?

The Budget 2016

This is both astonishing and worrying. The social care sector is in crisis. After six years of punishing budget cuts and reductions in local authority fee rates the sector is, as CQC state, “at tipping point”.

Effects of the funding crisis

We have already seen the effects of the cuts:

• An increasing number of care providers exiting the market;

• Providers handing back local authority contracts which don’t pay enough to cover operating costs, let alone make a profit and ensure the sustainability of their business;

• A strikingly high number of providers lacking the resources to sustain quality services, reflected by a drop in their CQC rating to ‘Inadequate’ or ‘Requires Improvement’

• Increase in the number of forced home closures; and

• Significant increases in the number of insolvent care businesses.

Reasons to increase funding

There were plenty of reasons for the Government to increase funding, but to name a few:

• Ensure the sustainability of the care market.

• Reduce strain on the NHS. There has been a considerable increase in delayed discharges from hospital due to a lack of social care funding. Not only is this extremely expensive (costing the NHS £800 million per year), people who could and should be cared for at home or in a care home are unnecessarily stuck in hospital.

• Enable care providers to invest in quality of care.

• Enable care providers to attract and retain high quality staff by paying more (there are already significant shortages, particularly in nursing, which will be increased by Brexit).

• Enable care providers to comply with the National Living Wage. Current local authority rates do not allow for this, particularly for sleep-in shifts.

• Remove the need for providers to cross subsidise low local authority fees with higher private fees to keep their businesses financially viable.

What now for providers?

Unfortunately, the unsatisfactory status quo is being maintained. Additional funding is expected in 2018/19 but that does not solve the immediate challenges and it is unlikely to fill the funding gap.

This may mean that we see a further increase in providers facing tough CQC enforcement action or exiting the market.

If you are facing difficulties because of the funding crisis, we are here to help:

Fee negotiations with local authorities

Providers have faced significant cost increases, particularly staffing costs (including the National Living Wage and pensions). Some local authorities are not reflecting these increases in the rates they pay providers, particularly for travel time and sleep-in shifts. We have a strong track record in successfully negotiating fees on behalf of providers and care associations.

Terminating local authority contracts

If your contract with the local authority has become unviable and you want to bring it to an end, we can advise you on how to do so in a lawful way – complying with the terms of the contract, the TUPE regulations and the duties you owe to your service users.

Challenging CQC inspection reports and enforcement action

If you receive a poor inspection report, Warning Notice or Notice of Proposal to cancel registration it is important that you act promptly to give you the best chance of success. Seek advice on your grounds of challenge as early as possible and secure legal input on drafting the factual accuracies challenge or representations.

Advice on exiting the market

If you are thinking of selling your business, we can advise you on the preparatory steps you should take and help with the necessary legal work. We can also put you in touch with specialist selling agents and accountants to help maximise the value you obtain and ensure your sale is structured to in the most tax favourable way.

Share on:

Your Comments

Leave a comment

Thank you for choosing to leave a comment. Please keep in mind that comments are moderated. Please do not use a spammy keyword or a domain as your name or it will be deleted.