The social care system in England is in a state of crisis. The sector is struggling to recruit and retain staff, and as a result standards are falling, and many people are not getting the care services they need. There is also now the added issue of inflationary pressures and rocketing gas and electricity bills. 

Liz Truss, the new Prime Minister, stated in one husting that she would divert the £13bn of funding earmarked for the NHS to deal with the Covid backlog to social care instead.

This idea was branded as “robbing Peter to pay Paul” by Richard Murray, the chief executive of the King’s Fund, and “not a sustainable solution to the health and care crisis.” 

Social care has been in trouble for many years, but plans for reform have been kicked down the road by successive Conservative governments. Despite what Boris Johnson said in his leaving speech, he did not reform social care. In fact, it is now in an even worse state than before Johnson’s term as PM as the long-term impact of years of austerity and the Covid-19 pandemic is being compounded by spiralling inflation and intense pressures on the labour market. 

Whilst Truss’s acknowledgement of the crisis in the social care sector is welcome, how her plans for the sector will make a difference are not clear yet.

There are reports that the new Health and Care Secretary, Thérèse Coffey, is examining proposals to re-introduce the Discharge to Assess programme used during 2020/21 to free up beds for Covid-19 patients. Under the scheme, care homes were paid to look after patients who were medically fit to leave hospital but could not be discharged because of a lack of social care.

The Department of Health and Social Care (DHSC) believes the scheme could free up thousands of hospital beds currently occupied by “delayed discharge” patients and so reduce the time taken for handovers by ambulance crews to A&E staff.

Funding for the original scheme was ended in March 2022, despite opposition from NHS Providers, the NHS Confederation and many others in the NHS. The cost of the new scheme would be in the hundreds of millions of pounds and would have to be approved by the Treasury.

However, the issue is broader than delayed discharge. More people than ever need social care, in particular due to mental health issues, domestic abuse and safeguarding concerns, and an increase in cases of breakdown of unpaid carer arrangements.

A recent analysis of care needs among the over 50s by Age UK found that 2.6 million people aged fifty and above, that’s 12% of this age range in England, are living with some form of unmet need for care in England. 

The major issue for care services is lack of staff. The latest data on vacancies in England shows that in 2021/22, there were 165,000 social care vacancies, that’s almost 1 in 10 posts vacant, an increase of 52% from 107,000 vacancies in the past year. 

Companies do not have the staff to take on contracts: ADASS, the Association of Directors of Adult Social Services, reports that 7 in 10 directors of adult social services say that care providers in their area have closed, ceased trading or handed back contracts to local councils, many due to staffing shortfalls.

The lack of staff has a number of consequences: quality of care is falling; staff become overworked and stressed leading to problems retaining staff; and delayed discharges from hospital increase as no home care plan can be set up.  Delayed discharge from hospital has a knock-on effect on A&E and elective surgery, increasing waiting times and leading to cancelled surgery. HSJ recently reported that there are cases of people waiting months for discharge from hospital.

Caroline Abrahams, charity director at Age UK, told HSJ that the shortage of home care is “crippling patient flow in many hospitals” and has created an “utterly miserable situation”. She said this has been caused by “low pay and poor conditions” in the domiciliary care sector.

A recent analysis of care home reports by the Guardian found that staff shortages were identified as a key problem in three-quarters of all the care homes in England where the CQC had downgraded their rating from “good” before Covid-19 to “inadequate” in summer 2022. Problems identified due to a shortage of staff included being left in a room all day, assaults by other residents due to lack of supervision, and residents left in urine-soaked clothes.

It is undoubtedly pay that is the crucial issue in recruitment and retention of staff. A Care England survey in August 2022 reported that in their exit interviews, when asked why they were leaving, two-thirds of staff cited pay, just under half cited stress, and a third negative work environment and shortages in staffing.

The minimum rate for staff over the age of 23 in June 2022 was just £9.50 an hour, the statutory minimum set by the national living wage. And it has been estimated that around 50% of care workers earn within 30 pence of the national living wage level. 

It is difficult for the companies to attract staff when local supermarkets and hospitality often pay better. In June 2022, The King’s Fund reported that nine out of 10 supermarkets paid more than £9.50 an hour, with Tesco, Asda and Lidl paying £10.10 per hour. Care workers are also attracted away from permanent employment to work via agencies. A Care England survey in August 2022 found that agency rates were significantly greater for carers (£19.57 vs £9.90) compared to employee hourly rates. 

Care companies have had to pay bonuses, pay increases, retention payments and other financial incentives to retain staff, but although improved benefits and better training for staff is an objective for everyone in the sector, the companies say this current approach is not sustainable, in particular in light of additional inflationary pressures on food and utilities. 

It is clear that for the sector to stand any chance of competing successfully for permanent staff in the current economic climate, it will have to improve pay and conditions permanently rather than on an ad hoc basis. 

Unlike the NHS, the care sector consists of hundreds of companies, mainly privately-owned, but a significant number of not-for-profit companies and charities, of varying sizes each with its own individual financial situation. How then do you inject £13bn into the sector and get the desired result of more staff with better pay and conditions, leading to increased care services?

The Homecare Association has already written to Liz Truss, outlining what will be needed to ensure adequate availability of homecare services this winter and beyond; money to cover higher fuel costs incurred by home care workers, immediate financial support to manage the pressures of Covid-19 and influenza over the coming winter, and an increase in baseline funding for home care by at least £1.7bn a year to support recruitment and retention of care workers by enabling payment of wages equivalent to NHS Band 3 Healthcare Assistants.

Local authorities who commission vast quantities of care from these companies are in a position to incentivise care providers to pay higher rates, and probably would have done this over the years if chronic underfunding of local councils by over a decade of conservative governments hadn’t taken place. As a result local authorities have been very limited in what they can pay these companies, making it harder for providers to increase wages in response to rising vacancies. 

So in theory money targeted to local authorities would enable them to pay companies more, which could in turn lead to increased pay and better conditions for staff, increasing recruitment and improving staff retention. 

Any proposed Discharge to Assess plan, however, would target the care home sector with money paid to homes to take discharged patients. Whilst there are many individual care homes and smaller chains of care homes that are struggling financially, this sector also contains several large companies, owned by private equity, which appear to be awash with money and which made large profits during the pandemic and the use of Discharge to Assess.

In July 2022, an investigation by the Centre for the Understanding of Sustainable Prosperity at Surrey University and Trinava Consulting with the trade union Unison, found that the UK’s biggest care home chains saw their profit margins jump by 18% on average during the pandemic, while the highest paid director’s salary surged to £2.3m. Meanwhile these companies continue to advertise jobs paying just £9.50 per hour.

A recent article in the New Yorker highlighted what happens in the USA when private equity takes over a nursing home; staff as the biggest cost are cut to a minimum, standards fall and as a result residents suffer more malnutrition, dehydration and bed sores, and they therefore make more visits to the emergency room (A&E) as conditions that would be prevented by good care go unchecked.

How the private equity owned companies in the US behave, gives an indication of how private equity owned companies in the UK care sector may respond if the local authority was able to pay more per patient or they get paid for Discharge to Assess – rather than increasing staff pay and improving conditions, they may well see it as more profit. 

Unison has highlighted the growing role of private equity in the UK sector, finding that more than one in nine (12%) care beds in the UK were now in the hands of investment firms. The Held to Ransom report from Unison in June 2022 has already revealed cost-cutting at several unnamed firms, including allegations of food and cleaning products being replaced with cheaper substitutes and residents’ meals being reduced from three to two a day. 

Christina McAnea, the Unison general secretary, said: “The sector is on its knees, staff are leaving in their droves and those who rely on care are getting a raw deal. Yet many care home owners continue to see their financial fortunes soar amid this crisis. Root-and-branch reform is needed now with profiteering removed from social care.”


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