Almost half of social care providers were forced to hand contracts back to local authorities last year because of financial pressures, new research shows.
Sector Pulse Check, published by the learning disabilities charity Hft, says 45 per cent of providers had to relinquish contracts last year, with 52 per cent saying they expected to have to hand contracts back in the near future if the financial situation did not improve.
Almost all the providers – 95 per cent – said rising wage bills were the main pressure on their finances.
The government has been increasing the National Living Wage without an accompanying rise in public funding, the report says.
Jacqui Roynon, executive director of people & communications at Hft, said: “Once again, unfunded increases in the National Living Wage continue to be the biggest financial pressure facing providers.
“While it is absolutely right that social care staff should be paid more for the invaluable work that they do, this must be factored in to the rates at which social care packages are commissioned.
“With wage levels due to increase to £8.72 per hour in April 2020, it is vital that providers are funded to continue to pay higher wages in a financially sustainable way.”
The survey found a large rise in the proportion of providers who said that further funding cuts could lead to a reduction in the quality of care they provide. This rose from 11 per cent in the same research carried out last year to 43 per cent in the latest study.
Almost six out of 10 providers said the situation in the social care sector became worse during the three years to July 2019 in which Theresa May was the Prime Minister, the latest research found. Only 3 per cent said it got better during that time.
Rhidian Hughes, chief executive of the umbrella body the Voluntary Organisations Disability Group, said the under-resourcing of the social care system could not continue.
“As demand for services increases, some providers are being forced to support fewer people and others are reporting a lower quality of care,” he said.
“High-quality support services for disabled people can be transformative, yet for social care providers operating in such an under-funded, over-stretching operating environment, the ability to invest in innovative solutions and services is almost impossible because instead the focus lies on staying afloat.
“Central government must take steps immediately to agree and implement the delivery of a sustainable solution that reverses these deeply worrying trends, creating a social care system that is both resourced and supported.”
Researchers from the consultancy the Centre for Economics and Business Research surveyed 77 social care providers for the report.
A breakdown of participants in the survey is not available because it was completed anonymously, but a number of charity bodies promoted the survey among the social care providers in their networks.