Quarter of private firms at risk of insolvency after struggling to deliver services on funding offered, investigation finds

This article is more than 3 years old

This article is more than 3 years old

Ninety-five UK councils have had home care contracts cancelled by private companies struggling to deliver services on the funding offered, an investigation has found.

As a result, a quarter of the UK’s 2,500 home care providers were at risk of insolvency, and almost 70 had closed down in the past three months, according to the BBC’s Panorama programme.

The agencies – which provide help for people living independently at home – also struggled to recruit and retain staff, Panorama reported.

One home care company – Cymorth Llaw in Bangor, Wales – was forced to hand back its contract with Conwy council because it felt unable to provide adequate care with the council’s funding offer of £15 an hour. Ken Hogg, its co-director, told the programme: “We didn’t think we could do it for the money – it was as simple as that.”

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He said the company had always paid employees above the national minimum and living wage but with pension contributions, national insurance and training – among other costs such as mileage and travel time – the amount the council was paying “doesn’t leave a great deal”.

Panorama also found a similar issue at home care company Mears, which cancelled a contract with Liverpool city council in July, saying £13.10 an hour was not enough to cover the costs, and at least £15 an hour was needed.

Alan Long, an executive director at Mears, told the programme: “That was a terrible thing to do for both service users and for care staff. We absolutely did not take that lightly, but frankly what choice did we have?

“We just cannot do the two most basic things that you need to do in home care – one, pay staff the absolutely minimum of a living wage and, two, be able to recruit people, enough people to deliver the service that Liverpool council actually expected from us.”

The Local Government Association warned in January that the number of people who had “unmet basic needs”, such as getting washed, dressed or being helped out of bed, could rise because of “continued underfunding” of social care. It said those who received care could face shorter visits from carers.

Problems arranging social care in the community have also led to an all-time high in the number of delayed discharges from NHS hospitals, with patients who are medically fit to leave unable to do so.

There have been repeated calls for more money for social care, with charities, local councils and thinktanks saying the gap in funding was between £1.3bn to £2bn.

In this month’s budget, the chancellor, Philip Hammond, announced £2bn of extra funding for social care over the next three years, and said the system was “clearly under pressure”.