Care firms ditch council contracts over lack of funds

CARE providers have cancelled contracts with 95 councils because the funding they receive is simply not adequate to deliver services, a BBC investigation has found.

Research for Panorama by Opus Restructuring and Company Watch also found that 69 homecare companies have shut down in the last three months - and a quarter of 2,500 homecare companies are at risk of becoming insolvent.

In October, regulator the Care Quality Commission warned that social care has reached a "tipping point" as growing pressure caused by rising demand and limited resources means more people are not getting the help they need. This, in turn, is putting more pressure on the NHS.

Meanwhile, industry body the UK Homecare Association said inadequate funding from local authorities means the homecare sector faces a £513m deficit in 2016-17. It warned of a "postcode lottery" in the prices councils are willing to pay for essential care, even within the same region.  

Last month, charity Age UK claimed the system is facing "complete collapse" and it found that almost half of councils (48 per cent) had seen at least one homecare provider go bust in 2015-16, while 59 per cent said at least one provider had handed back a contract.

The study said 1.18 people over 65 do not receive the care and support they need with essential daily activities, up by nearly half - 48 per cent - compared with 2010.

The Government has said £7.6bn in dedicated social care funding is available to councils over four years. Chancellor Philip Hammond announced an additional £2bn for social care over the next three years in the Budget, including £1bn for 2017-18.  

But Cllr Izzi Seccombe, chairman of the Local Government Association's Community Wellbeing Board, said the Panorama figures show a system under "enormous strain".

The LGA estimates that social care faces a funding gap of £2.6bn by 2020 and the extra funding in the Budget "just a starting point".

"There is already an expectation that the money will reduce the immediate pressure on the NHS. But it is desperately needed to protect vital support services, like homecare, ensuring older people and those with mental health conditions, learning and physical disabilities live dignified and fulfilling lives," she said.

"The overall funding pressures facing councils will also mean they will need to make further cutbacks to vital services this year, including social care.

"That is why it is so important that the Government's Green Paper on social care will see local government leaders playing a central role in finding a long-term solution that reforms and fully funds our care system. This is essential if we are to do more than just help people out of bed and get washed and dressed but ensures people can live independent, fulfilling lives in the community, and relieve pressures on care providers and avoid widespread market failure.

"With councils facing further funding pressures and growing demand for support by the end of the decade, this is the last chance we have to get this right."