The House of Commons’ Public Accounts Committee have warned that care homes could close because of a shortfall of funds and the additional cost of paying the National Living Wage.
The committee believes that as much as £4.3billion more could be needed to cover the cost of adult social care.
Meg Hillier, chair of the all-party committee, said: “There is a real threat that many care providers will not survive. Local authorities have a statutory responsibility to ensure that there is a sustainable local care market and a diversity of providers.
“There are indications that the sustainability of the care market in some areas is at risk: many providers are not sure they can continue to operate as fees from local authorities drop, wage increases come into force and as they experience difficulties recruiting and retaining enough suitably qualified staff,” the report says.