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The real cost of caring

This is the first of a series of articles looking at the issues affecting the care sector in the UK.

150,000+ deaths and as many as one in five people suffering longer term ‘long-COVID’ effects, an economy that shrank by 9.9% in 2020 and predictions of unemployment reaching 6.5% (about 2.2 million people) by the end of 2021. The pandemic has cast a terrible shadow over the nation and the world.

It has also shone a harsh light on many of the problems in various sectors, a key one being that of the UK’s care sector.

The challenges to the care sector in many ways haven’t really changed from what they were before the pandemic. The proportion of over 85 year olds is set to double over the next 25 years. There are going to be 10 million more people living with two or more chronic conditions in the next 20 years. Added to that, higher levels of childlessness among the ‘baby boomers’ of the 1960s has resulted in there being fewer adult children to provide informal care, increasing demand for paid-for care and further pressure on an already overstretched care system. It’s estimated that, today, approximately 1.4 million people are living without the care need.

At the same time as the demographic challenges, public funding for care has been in relative decline. In 2007 public funding accounted for around 72% of care home spending. By 2020 that percentage had fallen to 54%. Local authorities (whose spending power in England alone has declined by 18% over the last decade) are understandably looking to get as much ‘bang for their buck’ as they feasibly can. This has resulted in the erection of higher barriers to get funding for expensive residential care and the further growth of (generally cheaper) domiciliary care and housing with care.

While there has been some increase in funding with local authorities able to charge a 3% precept on Council Tax and the Better Care Fund as well as some alleviation of increased COVID costs, the House of Commons Health Select Committee in late 2020 warned that it was ‘clear from evidence that funding shortfalls are having a serious negative impact on those who use the system, as well as impacting the pay of workers and threatening sustainability of the care market.’ The bare minimum increase in funding they judged to be approximately £4 billion per annum.

The pandemic hit the residential elderly care sector particularly hard. Although considered likely be an undercount due to lack of early pandemic testing, over the last year there have been approximately 38,000 COVID-related resident deaths – that’s roughly one in 10 of all care home residents. Occupancy levels across the residential care sector have dropped by 9% with an expectation that occupancy levels won’t get back to pre-pandemic levels until 2023/24. For operators often making relatively small margins, the reputational and financial impact of COVID presents clear dangers, leading to an upsurge in care business sales, further investment in domiciliary care and banks and investors eyeing finances very carefully.

For a decade or more successive governments have placed the funding of the care sector in the ‘too difficult’ box. The current Government said they ‘have a plan’ in 2019 which has not yet seen the light of day although there are further promises of a Green Paper on social care funding later this year. The sector will hope that, when it does finally come, the plan will provide necessary funding to ensure quality services can be provided to the increasing numbers of people needing care and a fair settlement of the intergenerational funding issues inherent in care, as well as a firm financial foundation for continuing investment in the sector.

Sectors and Services featured in this article

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