Significant numbers of large providers are not financially resilient, Government has been warned in a new report.
Government watchdog the National Audit Office finds that over half (55 per cent) of large for-profit care homes reported a return on investment of less than 5 per cent in 2019. Around 39 per cent of for-profit care home providers have current liabilities which exceed their current assets, according to a new report, Adult Social Care Market in England.
It also highlights that most local authorities pay care providers below a sustainable rate – an average of £662 per week for older adult residential care, and £715 per week for a nursing care. Effective long-term commissioning is also hampered by short-term funding settlements.
The NAO says: “The Department does not have a clear strategy to develop accommodation for adults with care needs.”
By 2038, 57 per cent more adults aged 65 and over are expected to need care, compared with 2018. Over this period, the total cost of care is projected to more than double (106 per cent) for adults aged 65 and over, due to the ageing population.
Privately-funded care homes are likely to benefit most from the changes, due to a projected increase in the proportion of home ownership and self-funding residents.
Public Accounts Committee chair Meg Hillier MP, said: “This unsustainable situation can’t go on – government must get a grip on the crisis in social care and it must do it now.”