Hft, a charity supporting people with learning disabilities, and Care England have published their 2023 annual report showing a snapshot of finances and the workforce in the adult social care sector.

The findings show unsustainable financial and workforce pressure in the sector. Despite government investment, adult social care providers reported no noticeable differences in the key challenges faced and grants were not reaching the people who need it the most.

Of the 122 organisations surveyed, 40% reported a deficit in 2023 raising concerns of where the £7.5 billion government funding boost is going. Care England has questioned how 84% of care providers have reported no difference in financial sustainability considering the funding initiatives – such as the Market Sustainability and Improvement Fund and International Recruitment Fund.

The financial challenges

Due to the financial challenges faced by service providers, many have had to reduce their capacity to deliver care:

-          18% offered care to fewer people.

-          19% made staff redundancies.

-          39% considered exiting the market.

-          43% closed part of their services or handed back contracts.

The biggest cost pressure, highlighted by 81% of care providers surveyed was the workforce, with 79% of providers stating the annual increase in the National Living Wage was the most significant workforce-related cost.

The workforce was not the only increasing cost, with utility bills being mentioned as a demanding cost pressure. There were reported energy increases of up to 350%.

The workforce challenges

Paying the workforce is not only a financial challenge but has led to a crisis within the workforce. Staff pay was reported by 86% of providers as a key barrier to recruitment and retention. Due to the high vacancy rate, providers are offering additional staff benefits including increasing pay and offering flexible hours.

Poor perceptions of a career in adult social care were cited as another barrier. The report states that

’Poor perceptions of social care as a career reflect, in part, a widespread sense within the sector that it does not enjoy parity of esteem with the NHS and is not afforded the same level of respect from government or across wider society.’

International Recruitment

Care providers have seen an increase in international applications, and while this has provided a lifeline for some service providers, 26% said that international applications were ‘not applicable’.

The largest increase in international hires (70%) was reported by large care providers (those with 1,000+ staff). This may be due to the additional costs associated with international recruitment, such as legal services and license fees. International recruitment adds additional administrative tasks, which larger providers are more capable of managing.

While the government did commit an additional £15 million to assist care providers with international recruitment, this has not had the impact that was expected.

Addressing the crisis

The report’s findings show the current approach to adult social care funding is inadequate. Suggestions put forward by the report were to alleviate cost pressures by revising VAT arrangements, introducing agency fee caps and removing VAT surcharges on energy bills for adult social care providers.

Additional recommendations include:

-          Establishing a national commissioning standard.

-          Making international recruitment more accessible to all providers.

-          Introducing a national approach to adult social care representation on ICBs.

The adult social care industry needs significant respite and change to improve the pressures faced in the last few years.

Our Associate Director Mark, who is head of our permanent social care team commented:

The findings in this report make for difficult reading, the providers and workforce are consistently being squeezed into unsustainable models which can only end one way. The sectors key voices, including HFT, have been calling for transparency in regards to the funding numbers being promoted by the Government with little success. These findings confirm care providers are not seeing the benefits of these promises with the majority of them reporting no difference to their financial stability. With the new National Minimum Wage increasing in April and no plan to help care employers accommodate this additional cost with referral fee increases, we could see companies going out business and a large proportion of vulnerable people without support.

To find out more, you can read the report here. To share your thoughts, get in touch or follow us on LinkedIn.​