Funding squeeze pushing care charities out of sector

”Much bigger than just being about money” – the third sector social care providers not paid enough to cover their costs

Thursday 16th May 2019

Increasing numbers of third sector care providers are withdrawing from areas of the social care sector because they do not receive enough funding from local authorities to keep delivering contracts, it has emerged.

The research by the Coalition of Care & Support Providers in Scotland (CCPS) raises concerns about the effect on vulnerable people being cared for and the sustainability of the wider care sector.

Reasons for charities and social enterprises withdrawing from services include insufficient funding for wages, councils refusing to pay for care workers’ travel time and providers being asked to deliver care they believed to be inadequate.

The group, which represents more than 80 of the largest not-for-profit care providers in Scotland, says funding needs to be ‘more realistic’.

Academics at the University of Strathclyde, who carried out the research on behalf of CCPS, spoke to 16 charitable organisations with a total of almost 50 contracts with local councils to provide care and support between them.

The study reveals structural problems with the way social care in Scotland is funded, with the ‘vast majority’ of interviewees recounting more than one example of handing back a contract.

One interviewee said their organisation could not ‘sustain subsidising public services any longer’, while another said ‘all the risks’ were borne by the provider.

A common theme is that councils, which themselves are under financial pressure, are passing the risk on to care providers and holding down prices in the social care ‘market’.

Funding from local authorities was ‘at times insufficient to cover the direct costs of service delivery, let alone the overheads that providers need to cover in order to survive, and took no or inadequate account of the travel costs involved in delivering services,’ the report states.

In some cases, care providers withdrew because they thought the services they were being asked to deliver were not in users’ best interests, such as where sleepover shifts were removed.

Some admitted to ‘moral conflicts’ about whether to withdraw from a contract because their charity could no longer afford it, knowing this could affect vulnerable people with dementia or other health conditions.

One care provider said: “So, this is much bigger than just being about money. This is about people’s lives, and working in ways that enhance people’s lives, rather than diminish people’s lives just because it saves a bit of money, or because it suits the system and the organisations.”

Another described the effect on staff as “heart-breaking”.

Well-documented recruitment and retention challenges emerge again in the report, with turnover in some areas said to be as high as 40%.

This forces providers to rely on expensive agency staff – who cost providers as much as £17 per hour.

The authors warn the number of providers withdrawing from contracts is ‘only likely to intensify’ and say many problems are due to a lack of cash from central government.

CCPS is calling for ‘more realistic funding that accounts for the actual cost of care,’ including the costs of paying the living wage, sleepover shifts, time spent travelling between appointments, and training and development.

The coalition also wants providers to have more protection in negotiations through the introduction of minimum standards for aspects like hourly rates, volume of work and minimum employment conditions.

There is also a call for providers that go above these minimum standards for workers to be awarded ‘exemplar’ status.