LaingBuisson’s Homecare, Supported Living & Allied Services report has concluded that UK homecare services need a new business model if they are to survive in a climate of falling profitability and in which variable quality has undermined confidence in the sector.
Since the beginning of the millennium social care budgets have been shrinking, stricter eligibility criteria have crept in, to ensure reduced budgets are used to provide care to the most needy, and as a result the number of individuals in England receiving homecare through their local authorities has fallen from 415,000 in 2000 to roughly 279,000 now. Those receiving care in the home tend to have more complex needs and so the average number of hours of care provided per person have increased from 6.7 to 13 hours per week.
This reduction in users, and increase in intensity has evolved at the same time as a shift from in-house provision to use of independent sector organisations. Latest data suggests that 97% of publicly funded contact hours in England are now outsourced to independent sector providers. But despite having taken over almost the entirety of supply, independent sector providers serving the publicly funded market have suffered from a severe squeeze in prices and profitability, this is in stark contrast to the privately funded market which remains profitable, and reflects the downwards pressure on fees paid by those commissioning services, usually local councils.
On average each care provider will be dependent on 31% of private clients, with 69% of their services being bought by local authorities or the NHS. The sector is therefore highly dependent on public sector commissioning decisions, far more so than the care home sector where over half of demand is financed privately or quasi-privately. Heavy reliance on cash starved public sector commissioners is a major risk for homecare providers as austerity policies.
This dependency is alarming, according to report co-author and healthcare researcher Eleni Giatsi, given that since 2010 the gross social care spending envelope for English councils has fallen by 8% in real terms. Ms Giatsi commented “This cocktail of financial pressures, staffing shortages, a shrinking budget from local authorities, and various instances of quality concerns create a fragile ecosystem in homecare provision.
At the same time, however, local government and the NHS have started to view the provision of care and support services within peoples’ own homes as a lever for achieving integrated care goals and providing better care. What’s more, private individuals are increasingly exploring homecare as an alternative to moving into residential care settings.
This is a genuine ‘make or break’ moment for the homecare sector - either it will succumb to the pressures of a bust, price driven,’ time and task’ model and deteriorate further into a low quality product –or forward looking commissioners and providers will seize the opportunity to develop sustainable, outcome-based business models delivering integrated homecare services across the boundaries of social and health care.”
This reduction in users, and increase in intensity has evolved at the same time as a shift from in-house provision to use of independent sector organisations. Latest data suggests that 97% of publicly funded contact hours in England are now outsourced to independent sector providers. But despite having taken over almost the entirety of supply, independent sector providers serving the publicly funded market have suffered from a severe squeeze in prices and profitability, this is in stark contrast to the privately funded market which remains profitable, and reflects the downwards pressure on fees paid by those commissioning services, usually local councils.
On average each care provider will be dependent on 31% of private clients, with 69% of their services being bought by local authorities or the NHS. The sector is therefore highly dependent on public sector commissioning decisions, far more so than the care home sector where over half of demand is financed privately or quasi-privately. Heavy reliance on cash starved public sector commissioners is a major risk for homecare providers as austerity policies.
This dependency is alarming, according to report co-author and healthcare researcher Eleni Giatsi, given that since 2010 the gross social care spending envelope for English councils has fallen by 8% in real terms. Ms Giatsi commented “This cocktail of financial pressures, staffing shortages, a shrinking budget from local authorities, and various instances of quality concerns create a fragile ecosystem in homecare provision.
At the same time, however, local government and the NHS have started to view the provision of care and support services within peoples’ own homes as a lever for achieving integrated care goals and providing better care. What’s more, private individuals are increasingly exploring homecare as an alternative to moving into residential care settings.
This is a genuine ‘make or break’ moment for the homecare sector - either it will succumb to the pressures of a bust, price driven,’ time and task’ model and deteriorate further into a low quality product –or forward looking commissioners and providers will seize the opportunity to develop sustainable, outcome-based business models delivering integrated homecare services across the boundaries of social and health care.”
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