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‘Stand Up and Be Counted’ – An appeal to the Domiciliary Care sector

9 June 2015

As is de rigeur for a General Election year, we have recently been treated to a seemingly unending torrent of hyperbole about the parlous state of NHS finances. In the run up to May 7th, Labour cranked up the doom-mongering and revived its well-worn war cry of ’24 hours to save the NHS’. Meanwhile, the Conservatives were at pains to prove their ‘NHS trustworthiness’ and pledged to funnel another eight billion pounds in the Health Service’s already gargantuan budget. The irony that this would ultimately be funded by other public sector bodies learning to spend their (now reduced) budgets more prudently appeared lost on all involved. However, those ‘in the know’ within Health & Social Care have for a long time been pointing to a different funding crisis beginning to take shape within the sector; namely the critical state of domiciliary care.

Unlike NHS services, domiciliary care (or ‘home care’) services are for the most part funded by local authorities’ social care budgets. As public spending is reined in, budgets available for funding home care services have been shrinking at an alarming rate. The Association of Directors of Adult Social Services’ (ADASS) president Ray James points out that “[NHS funding has] been increased from £97.5 billion in 2010-11 to £116.4 billion in 2015-16, an increase of 19.3%., while over the same period, social care funding has decreased from £14.9 billion to £13.3 billion, a reduction of 10.7 per cent - and more in real terms when demography is taken into account”. Businesses providing domiciliary care services now find themselves trapped between a rock and a hard place and face attacks from all sides. On one hand, the fees paid to them for providing care visits are falling – a recent survey by the UK Homecare Association (UKHCA) found that out of over 200 councils, just 28 paid a ‘minimum price’ of £15.74 per hour for a home care visit. This is the minimum price which UKHCA believes should be paid to guarantee the payment of at least the national minimum wage to the carer and a small surplus/profit (47p of the £15.74) to the provider. More shockingly, the UK average fee came out at just £13.66 per hour.

On the other hand, providers find themselves dragged through the kangaroo courts of the press for allegedly paying carers less than the minimum wage, or for only being able to offer 15 minute visits to service users. With such razor thin profit margins on offer, providers have precious little surplus to invest in to staff training and retention programmes, meaning a less skilled, less engaged and more transient workforce going out in the field each day. Carer turnover in domiciliary care providers is astronomically high and providers struggle to keep attracting new carers to their ranks. Finally, unlike care delivered within an NHS hospital or a care home, domiciliary care involves sending carers behind closed doors in to the service users’ home. The risk of one carer misbehaving and costing an entire business its reputation is one of the innumerable things currently keeping home care CEOs awake at night.

With this being the case, it’s difficult to imagine how the status quo is sustainable and even more difficult to understand why anyone would want to run a business in the space. The short answers appear to be that it isn’t and they don’t - we are now seeing some of the sector’s largest providers cutting their losses and calling time on their home care operations. In recent weeks, Care UK successfully sold off its domiciliary care arm to Mears Group for a rumoured £11.3m. The country’s largest provider - Allied Healthcare - is owned by the Saga Group, which recently wrote off a £220m loss against the business, reducing its balance sheet value to the princely sum of £0.00. Allied employs 15,000 carers. Meanwhile, FTSE 250 facilities management giant Mitie posted a strong set of annual results… with the exception of its homecare business, which posted a year-on-year loss of 61%. The group cited local authority spending cuts as the main driver behind the loss.

From a staffing perspective, the news is hardly promising. Years of underinvestment in people development has left the domiciliary care sector woefully under-resourced in terms of senior-level talent. Within my own specialism of interim management there is a notable dearth of high-quality operators with significant experience within the sector. More often than not, one has to look to other areas of the healthcare space for interims with transferable skills and encourage them to apply their skills to a homecare business. With margins plummeting, investors taking their money elsewhere and the workforce unprepared to cope with the fallout, it’s not difficult to forecast a perfect storm on the horizon.

The merger of Health & Social Care budgets will not alone be enough to solve this problem. The fact is that better-funded domiciliary care providers would be able to provide a higher standard of care, in turn keeping homecare service users out of overcrowded hospitals and thereby easing pressure on the NHS. They would also provide fairer wages to their carers, making the sector a more desirable place to work than it is presently. They could also invest in their people, consequently raising the standard of management and leadership across the board. NHS England CEO Simon Stevens has already worked wonders for the NHS, providing the strong, credible voice the Health Service needed on the national stage to secure its extra funding. Where will the domiciliary care sector’s leading voice come from? As it stands, the silence is deafening. The sector has reached a tipping point where ‘doing more for less’ is no longer possible and it needs a high-profile champion willing to shout this from the rooftops.

Dan Kiely, Consultant

Dan is a Consultant in the Healthcare practice, read Dan's profile

Categories: Healthcare


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