How is the cost of living crisis impacting social care?

In the News

The cost of living crisis is being felt across the country, with rising prices in food, fuel and utilities putting people under significant financial pressure. In order to help ease some of the pressure on unpaid carers, the Welsh Government recently introduced a new fund to support them through the crisis, with a £4.5 million investment in its carers support fund over the next 3 years.

However, with the social care sector already struggling from underfunding, what impact is the cost of living crisis having on the sector?

Bills “threaten our ability to provide any care at all”

The key concern for many providers is the ability to pay soaring gas and electric bills that will only continue to rise. This has been on radar since the energy price cap for consumers put utility prices in the spotlight. In March, Mike Padgham of the Independent Care Group called the rising costs for homes “a hidden crisis” which could “threaten our ability to provide any care at all.”

In feedback to Dr Caroline Green of King’s College London (see this month’s opinion piece), small and medium care providers have said that the cost of living crisis “is more reason why providers will be closing homes”. They cite “spiralling food costs, fuel costs and energy bills… as well as increasing staff costs.”

These increasing costs are, in part, employers having to contribute to the health and social care levy – in effect having to pay for their own funding. However, there are also the costs of having to bring in agency staff as existing staff leave the sector, driven away by low pay rates and the promise of more money in sectors such as hospitality. A care worker in the North East of England told the BBC “people with families, trying to get on the housing ladder, just can't afford to be in a job like this.”

In Scotland, survey findings from the GMB found that 70 per cent of 500 carers said their wages didn’t cover their monthly outgoings, with GMB Scotland organiser Kirsty Nimmo saying the statistics “tell another sobering story of the cost-of-living crisis facing key workers.”

Empty beds as people choose to keep costs down

With care providers having to raise costs to continue operating, people are choosing to stay at home to avoid costs. Recent estimates from the Office for National Statistics suggest one in five care home beds are empty in England, and Camille Oung of the Nuffield Trust suggests that among other factors, “heavy costs for people paying for their own care” is keeping occupancy down.

The crisis facing providers has prompted some to call for a return of the funding streams for social care present during Covid, with the Local Government Association (LGA) saying that the “loss of funding streams for social care puts councils and providers onto an even more unstable footing”. Meanwhile, despite Wokingham Borough Council increasing funding for adult social care by three per cent, Martin Green called the increase “inadequate”, and said “more is required” for local care providers. The leader of the council Clive Jones hit back, however, stating that while he agrees services are underfunded, it’s not “something the council can sort out” stating that every extra one per cent costs the council £550,000.

Interview

Avnish Goyal, Chair of Care England, outlines just how at-risk many care providers are should there be no financial assistance for the sector to deal with the cost of living crisis.

How is the cost-of-living crisis impacting the day-to-day running of English care homes?

The cost-of-living crisis is having a significant impact on care homes. As well as the general inflation rate increases, care homes have some specific issues which exacerbate the situation. For example, enormous increases in utility costs, and insurance costs, and because of the near full employment within the UK economy, care homes have also had to increase salaries and wages way above the normal inflation rate in order to recruit and retain care teams.

Care England’s members reported inflation rates at around 10 per cent in December 2021 when Local Authorities were planning 2022/23 budgets. This has since risen and will continue to rise by up to 30 per cent according to a survey carried out by financial analysts Knight Frank and reported in the Financial Times. This was driven by the increased cost of living and doubling of inflation since December (the Office for Budget Responsibility forecast Consumer Price Index inflation to 8 per cent in Q2), the energy crisis, and the removal of the Infection Control and Testing Fund which supported employers to ensure full payment for the self-isolating team members or pay employees who were required not to work in line with government guidance.

Are you seeing any signs that the cost-of-living crisis is impacting residency rates in English homes?

Occupancy levels in care homes have not returned to pre-COVID levels and the recovery is slow; data from the Office for National Statistics (ONS) indicates the number of care home residents has fallen by around 8 per cent since before the pandemic. Partly, this is due to the cost-of-living crisis, but there is also the issue of fewer people receiving local authority assessments, and the number of people who are now looking after their relatives because they were either furloughed or have much more flexible work-life patterns post the COVID-19 pandemic.

The government has pledged £500 million specifically for the social care workforce from the Health and Social Care Levy. Given the number of care teams quitting because of low pay even before the crisis, is this sum enough in your opinion?

The £500 million pledged by the government from the social care levy is totally inadequate and represents just over £100 a year over the course of three years for each member of a team in social care. This will not be enough to change terms and conditions and will do nothing to improve retention.

If no emergency budget is forthcoming, what impact do you think the crisis might have on the quality-of-care provision?

If we do not see an emergency budget, there will be an impact on the care sector. Care providers are in a regulated sector and must focus on quality, so they will try not to compromise on quality because of constrained resources. However, the real impact will be felt in capacity because many care providers may have to reduce the number of active beds in order to make sure they have enough teams to deliver on the regulatory standard. If we see reduced capacity, the problems in the NHS will be exacerbated, and we will see longer waiting lists for elective surgery.

Continual underfunding is a direct juxtaposition to the Government’s commitment to “fix social care” and to its flagship Levelling Up agenda to narrow health inequalities. There cannot be sustainable economic development without sufficient funding for social care.

With ONS figures of 1 in 5 beds in English care homes unfilled, how likely is it that, when combined with soaring costs, we will see large numbers of homes having to shut their doors?

High levels of occupancy are vital in order to make care services viable. If we see significant reductions in occupancy, we will inevitably see services that will no longer be sustainable and some will sadly close, and this will be incredibly stressful and upsetting for residents and their families.

Opinion

Dr Caroline Green, Post-Doctoral Fellow at the National Institute for Health and Care Research’s (NIHR) Applied Research Collaboration for South London, details some of the feedback her research has received from South London care providers on how they are being impacted by the cost of living crisis.

Providers of adult social care services and care workers in London are facing new stress due to the rising costs of living and inflation. The Fair Cost of Care reforms bring a glimmer of hope to many providers, but these are not yet in place. Meanwhile the sector is facing major problems in keeping existing staff and attracting new ones.

People across the UK are experiencing the steepest rise of inflation in the past 30 years. Consumer prices in February 2022 were 6.2% higher compared to the previous year. This means increased costs of living, from rising fuel, energy and food prices in particular.  Providers of adult social care and care workers in addition are grappling with continuing Covid-19-related requirements, staff shortages that mean they have to employ other more expensive temporary staff or curtail services, and other rising operational costs.

In our study for the NIHR Applied Research Collaboration (ARC) in South London we have been investigating the specific impacts of the rising costs of living with people running care home and home care services. Many have expressed frustration over the rising costs they are facing, which stretch beyond fuel, food and energy. They feel that inflation is making a situation worse that has been difficult for years. The manager of two care homes said:  

“The cost of living increase is further exacerbating an already difficult time for care homes. We have spiralling food costs, fuel costs and energy bills on top of the introduction of the health and social care (National Insurance) tax as well as increasing staff costs. Couple this up with homes having to lock down due to Covid outbreaks and not being able to accept new admissions and we have a real crisis”  

Some home care agencies told us they are less able to take on new customers because rising fuel costs and costs associated with driving in some parts of London make it too expensive for their staff to drive between customers. One home care provider highlighted the situation from extra travel costs:  

“Our customers are based across London, including one area that is an Ultra-Low Emission Zone. Ideally we had care workers who can walk or drive to the customer, but who can afford to live in London? With rising fuel costs plus costs to drive inside London care workers are less likely to take on jobs. The local authorities still only pay them by the minute. This is unsustainable.”  

The Department of Health and Social Care is implementing some funding changes through processes such as Market Sustainability and Fair Cost of Care. These are being designed to provide fair local authority payments to home care and care home services. The providers we talked to say this is offers a glimmer of hope but will not help with today's bills and pressures.

We are continuing our research to hear from care workers themselves and to find out if anything within the care sector is effectively offering some help. These include the impact of the London ADASS' Proud for Care discount scheme for care workers and assistance with income maximisation as well as increases in actual wages. We know that many people with care and support needs are also being affected and our work will add to the body of evidence about the accumulating stressors on social care systems and people.