The outlook for care homes in the UK ranges from serious to critical, as staff costs, nurse shortages, poor funding and increasing red tape are draining the lifeblood out of the sector.
The prognosis given in a new survey for BBC Radio 4 shows urgent surgery is needed to save care homes from rising costs and reducing resources. A new injection of local authority funding is urgently needed as more than a quarter of UK care homes are in danger of closure within three years, according to the survey.
The BBC research also revealed care homes were carrying too much debt and were not making enough profit to cover loan repayments.
Whilst most local authorities have this year added a two per cent hike to council tax to help pay for social care, this money has yet to seep through to care homes, though concerns have been raised that this money will still not be enough.
Care homes have been hit by the new National Living Wage of £7.20 per hour which is expected to rise to £9 per hour by 2020.
The survey revealed that the NLW not only pushes up the pay of those on lower scales, but across all staff bandings. Care homes are concerned that their rising payroll costs are not being met by cash-strapped local authorities who are unwilling or unable to match the increase.
Bishop Fleming Partner, Tim Godfrey, who heads the care home sector team, commented: “The survey reveals a care sector in a really serious to critical condition as care homes struggle to adapt to increasing pressures on their resources. Many are having to freeze their recruitment plans or drastically change their business models just to survive.
“Care homes funded by local authorities face closure unless these authorities meet the rising cost pressures. Whilst some councils have increased funding, it is clearly not enough to cover the burden.”