Austin Macauley 30 September 2015

Two-tier care system leaves state-funded provision on the brink says report

Austerity measures have created a two-tier care system with state-funded provision on the brink of going bust as the national living wage squeezes them even further, a report has warned.

Some 90% of residential and nursing care services are now delivered by independent providers with those operating in affluent areas with self-paying clients able to achieve healthy profits of up to 30%.

But local government cutbacks and the introduction of the national living wage have driven margins among state-funded providers down to 15%, according to healthcare experts LaingBuisson’s Care of Older People report.

It expects the roll out of the national living wage to erode profits further, unless they are ‘mitigated by higher fees’.

It added: ‘Where private payers may have the capacity to pay higher fees to prop up this new cost, unless there is an injection of more government funding most local authorities do not. As such “public pay” care home companies face the prospect of operating profits falling to a dangerously low level of around 10%, where even those with modest levels of gearing could face financial failure.’

The report said latest figures show the sector saw a net loss of 3,000 beds between October 2014 and March 2015 as more and more operators close.

William Laing, report author and LaingBuisson chief executive, said: ‘The big question now on the minds of both care company executives and local authority care commissioners is: will the Government make provision in the comprehensive spending review, due in late November, to bale out care providers facing the threat of going underwater?’

SIGN UP
For your free daily news bulletin
Highways jobs

Head of Democratic Services, Elections & Monitoring Officer

Harborough District Council
Grade 12 £67,236 – £71,223 plus £3000pa Statutory Officer Allowance
We are looking for an accomplished and proactive leader for our vacant post of Head of Democratic Services & Elections Market Harborough, Leicestershire
Recuriter: Harborough District Council

Residential Youth Practitioner

Oxfordshire County Council
£37035 - £39513
The Move On Service provides intensive supported housing accommodation for young people aged 16 to 18 years who are in the care of the local authority, working to create individual plans for those requiring additional support for their transition towards Witney
Recuriter: Oxfordshire County Council

Locality and Community Support Worker - North

Oxfordshire County Council
£37035 - £39513
The Locality & Community Support Service in North Oxfordshire are seeking to recruit a Locality Support Worker to join their Locality & Community Support Team. The successful candidate will be an enthusiastic worker who is passionate about improving outc Banbury
Recuriter: Oxfordshire County Council

Social Worker

Durham County Council
£35,412 - £39,152 (pre-progression) / £40,777 - £45,091 (post-progression)
We are looking for social workers who have completed the assessed and supported year in employment to join our Families First teams, working with our Durham
Recuriter: Durham County Council

Social Worker

Durham County Council
Grade 9 £35,412 - £39,152 (Pre-Progression) / Grade 11 £40,777 - £45,091 (Post-Progression)
Are you a nurturing social worker passionate about supporting parents so that children can remain with their birth family?     This could be the right Durham
Recuriter: Durham County Council
Linkedin Banner