Social care providers warn of risk of ‘widespread failure’ in sector

Major figures from within adult social care have penned a letter to government warning that, without “urgent action”, there will be “widespread failure” within the sector.

Adult social care sector faces risk of widespread failureMinisters have been warned that high employment costs, low fee rates and struggling councils all pose serious risks to the sustainability of the adult social care sector.

These issues are so serious that even large care providers supported by government funding risk collapse, while smaller companies face “even more serious” challenges.

Care England and the Homecare Association have warned that this will leave people in need without care, add to the strain on unpaid family carers and worsen NHS pressures.

Adult social care sector has reached “tipping point”

Care organisations warn that the collapse of adult social care provision would leave people without vital care and support and place additional pressures on unpaid carers and the NHSCare England is one of the largest representative bodies for independent adult social care providers in England, while the Homecare Association has 2,200 members from within the sector across the UK.

The two organisations have written an “unprecedented” joint open letter to the Health Secretary, Wes Streeting, Deputy Prime Minister Angela Rayner and Chancellor Rachel Reeves to say that the sector “has reached a tipping point.”

Their warning is stark:

“Without urgent action, we face the risk of widespread failure of many providers, particularly those serving the state-funded market.”

They commissioned industry analysts LaingBuisson to produce a report on the state of the care market. It revealed that up to 85% of care providers are small and medium-sized businesses and that the majority of care services are funded by the state.

In fact, this was the case for 57% of care homes for older people, almost 8 in 10 homecare services (79%), 89% of care homes for younger adults and almost all supported living services (96%).

Jane Townson from the HomeCare Association warned that widespread collapse would result in “a significant reduction in care and support services,” leaving thousands of vulnerable people without vital care and support.

Professor Martin Green, Chief Executive of Care England, said that the collapse of care providers amounted to the collapse of “entire support systems for people needing and receiving services.”

He added: “The human and economic cost will be devastating.”

Calls for immediate intervention to support adult social care

Keir Starmer’s government has pledged to overhaul health and social care and work to establish a National Care Service.

There are calls for immediate intervention to save adult social careHowever, the letter calls for immediate intervention from government in the form of a minimum of £2.8 billion investment in the sector. Its authors say this is the minimum level of investment needed to cover services, acting as a National Contract for Care services, while further funding will be needed to cover future demand.

A key ask for the sector is that care providers be exempt from changes to employer’s National Insurance contributions (NICs).

Employment costs represent 70-80% of care providers’ total costs, and it is estimated that these will rise by at least 10% in 2025-26 when increases in employer’s NICs and the national minimum wage take effect.

In fact, recent studies have estimated that local authorities providing social care services in England could be faced with £1.8 billion in additional costs as a result of hikes in NICs and the minimum wage, which were unveiled in the autumn budget.

These announcements sparked “deep fear” in the sector, the letter states. It continues:

“The government has chosen not to respond to representations made by the care and support sector. This suggests a lack of understanding of the sector or a lack of care about those affected. We offer this new and up-to-date evidence to help address the former.”

David Forthergill, social care spokesperson for the Local Government Association (LGA), confirmed that local authorities were facing “unprecedented financial challenges” which mean vital services are at risk of collapse.

He also commented:

“Adult social care, which supports millions of people to live with dignity, is particularly exposed, with rising costs threatening provider failures, longer waits for care, and growing unmet needs.

“Councils are reporting the likelihood of further cuts to core services and severe strain on health and care systems, including redundancies and providers handing back contracts.”

Meanwhile, a spokesperson for the Department of Health and Social Care commented:

“We are tackling the challenges facing adult social care and taking the first steps towards building a National Care Service by introducing legislation that will establish the first ever Fair Pay Agreement for care professionals and increasing the Carer’s Allowance earnings threshold by over £2,300 – the biggest rise since the 1970s.

“We are giving local authorities an additional £3.5 billion in 2025-26, including a £680 million increase in the social care grant to support the sector.

“Ensuring there is a stable economy is one of the foundations of our plan for change, which will deliver stability, growth and investment for communities across the UK.”

Training to support safe care

We provide quality training to help care workers deliver safe, compassionate, person centred care and supportFirst Response Training (FRT) is a leading, national training provider.

They deliver over 7,000 courses each year in the fields of health and safety, first aid, fire safety, food hygiene, mental health, health and social care and other special focus topics.

Their diverse portfolio includes training awards designed for health and social organisations, such as Infection Control and PreventionSafeguarding AdultsDuty of CareEquality, Diversity and InclusionUnderstanding Mental Health and many others.

A trainer from FRT explains:

“All those in the adult social care sector work incredibly hard to meet the needs of the most vulnerable people in society and ensure they receive safe, compassionate, person centred and dignified care and support. We hope the sector can receive the support it needs to continue this valuable work.”

For more information on the training that FRT can provide, please call them today on freephone 0800 310 2300 or send an e-mail to info@firstresponsetraining.com.