CMM - The Finance Edit

THE FINANCE EDIT

Finding clarity

Care markets review

Tackling it together

Managing energy contracts

Balancing the books

On goods and services

Not stacking up

The rising cost of homecare

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Welcome to CMM: The Finance Edit, produced exclusively for UK Care Week 2023. In this supplement, we bring you advice, tips and updates from some of the sector’s biggest names in business.

Across the nation, 37% of Britons end the month without any money left, while 24% say that they run out of cash for essentials most months. These figures are indeed bleak, especially when we consider that care staff are some of the hardest-hit financially at the moment and providers are feeling the pinch, too. The findings come from a survey set up for the Together Through This Crisis initiative, founded by Save the Children, Turn2us, Little Village, Shelter and 38 Degrees. The poll questioned people in both the 100 most deprived and the 100 least deprived constituencies in England, Wales, Scotland and Northern Ireland. Together Through This Crisis has written an open letter to Prime Minister Rishi Sunak and Chancellor Jeremy Hunt asking them to ‘take action to ensure the crisis illustrated by these figures does not become the UK’s new normal’.

For care providers across the UK this ‘new normal’ is affecting all areas of business delivery. The war in Ukraine and the associated energy crisis, along with broader cost of living pressures, have all had an impact in the last year – and that is on top of the acute staff shortages and rapidly rising costs that were already putting pressure on most operators.

As we continue to keep afloat and deliver sustainable care services in 2023 and beyond, there’s no denying that planning ahead and calculating costs will prove an enormous challenge, but there are some positives and, as ever, there’s support available from the sector where the positives are harder to find.

The level of demand and volume of care homes transacted during 2022 was at a 14-year high. Most encouragingly, current market participants include a number of new European organisations who are looking to either enter the UK market or increase their presence through building on existing investments. On page 4, Rob Kinsman, Regional Director – Healthcare at Christie & Co, shares key insights relating to the care markets and forecasts for 2023.

As energy costs have increased, impacting the sector’s financial stability, Care England is mindful of another volatile year ahead, as some energy suppliers remain unreasonable with prices and deals available, seek excessive upfront deposits, and charge hefty risk premiums, coupled with a low appetite to offer competitive deals. Richard Ayres, Senior Social Care Advisor at Care England, shares valuable advice on how to review options and contracts effectively on page 7.

Social care providers have experienced inflation of 10.5% in December 2022 across many areas. Marr Procurement has sourced over £400m of temporary labour agency

spend and has recorded 160 lessons learnt on how to cut agency costs without compromising on care quality. On page 10, Christoph Marr, Founder and Managing Director of Marr Procurement, explains what providers need to consider in view of escalating staff and business costs.

In CMM this year, Professor Vic Rayner OBE, Chief Executive of The National Care Forum, told providers that they are likely to find themselves having to manage some complex communications as they move between navigating fee rates with authorities and understanding the implication for self-funders to ensure sustainable services for the year ahead. On page 12, Dr Jane Townson OBE, Chief Executive of the Homecare Association, delves into the detail surrounding the latest Minimum Price for Homecare and how this relates to the rising costs of inflation.

If you’re still looking for information, the resources on page 14 should point you in the direction of further help. You can also sign up for free to the CMM website, where you’ll find thought-leadership on various topics, as well as a directory of organisations that specifically support adult social care providers.

We hope this supplement proves a useful tool for you to take away and refer to, or just to read and gather ideas.

The CMM Team

FINDING CLARITY:

The care market outlook in 2023

Specialist business property adviser, Christie & Co, has launched its Business Outlook 2023: Finding Clarity report which reflects on the themes, activity and challenges of 2022 and forecasts what 2023 might bring across industries, including the care sector. Rob Kinsman, Regional Director – Healthcare at Christie & Co, shares the key insights relating to the care markets.

In 2022, our deal numbers and volumes hit a 14-year high, as we completed on 78% more deals in 2022 than in 2020. This clearly shows how buyer appetite and confidence has bounced back following a subdued couple of years due to the pandemic.

Market composition

Corporate investors accounted for 33% of our completions last year, which is a significant increase from 22% in 2018. This reflects the increasing use of sale and leaseback finance in the healthcare market and a wide level of activity from a cross section of UK, US, and European Real Estate Investment Trust (REITS) together with institutional capital, and is further illustrated by analysing where buyers are based relative to the businesses which they acquire. In 2022, 48% of our care deals were concluded to buyers located over 100 miles from the target business, a 19% increase since 2015, which reflects an emerging national and international pool of buyers.

We saw a decrease in new market entrants in 2022, which can be largely attributed to regulatory challenges related to the Care Quality Commission (CQC) and funding challenges. Despite banks being largely active in the sector, it became more

difficult last year for new entrants with little experience to obtain bank funding and we don’t see these challenges easing in 2023. Successful new market entrants commonly have a financial or medical background (or both) and seek care homes (25-30 beds+) in areas where they can tap into the self-funded market and potentially grow the capacity of bed numbers. So, we’re seeing quite a sophisticated type of first-time buyer, which is a contrast to the ‘hands-on’ new entrant which very much dominated the market when I started as a broker over 20 years ago.

Good quality conversions with potential to expand are highly sought-after from existing providers seeking to expand their portfolios. We’re also seeing competitive bidding for new build opportunities due to a lack of quality opportunities and huge investor appetite for future-proof assets.

Encouragingly, over 40% of providers we polled at the end of 2022 indicated they were seeking to acquire another care home in 2023.

Regional disparities

There is a noticeable difference in demand for care homes in different UK regions as location has become increasingly

important. Buyer appetite is being led by the demographic profile and density of the population in any particular area; the level of local authority fee rates; the quality of housing stock and whether the care home is located on public transport routes. Buyers are also keen to understand the size of the self-funded market; the price of housing in the area and the demographic profile of the population within 10 kilometres.

Market challenges

Workforce issues have been a long-standing challenge for the care sector, with many providers reporting notable levels of agency use last year, albeit there are signs that this is now beginning to decrease. Operators are working hard to recruit and retain staff, with many adopting a very entrepreneurial approach, including partnerships with overseas training colleges to bring staff into the UK market.

Positively, occupancy rates are, in most cases, starting to return to pre-pandemic levels; however, local authority fee rates are proving insufficient to offset rising costs in the industry. We’re seeing income generated from private pay clients partially off-set this shortfall.

Rising energy and debt costs are also a significant challenge in the sector. Providers operating smaller, converted care homes are likely to have greater exposure to margin pressure and we are likely to see some greater levels of distress in this part of the market.

2023 forecasting

We remain cautiously optimistic about the year ahead. Longstanding challenges will remain in the sector, but we don’t believe this will dampen transactional markets and we will continue to see demand exceed the supply of quality opportunities in the market.

To illustrate this further, over 70% of operators recently polled said they are looking to either buy, sell, or both in 2023.

Environmental, Social and Governance (ESG) continues to be a key priority for investors within the care sector who are particularly well-placed to deliver good ESG outcomes. Whilst many care homes in the UK are older and less energy efficient, operators are now embracing the opportunity to make changes to their care

homes to improve their green credentials. We’re seeing increasing scrutiny from buyers, and their lenders, in the energy efficiency of care homes on the market and this is a trend that is sure to continue. We also expect to see:

• Continuing demand for good quality, future-proof assets.

• Investor sentiment to remain strong from a wide range of buyer groups.

• Continued growth in operators taking leases to grow their portfolios.

• Further transactional activity in the Operating Company (OpCo) market.

• Sale and leaseback finance will continue to underpin a notable number of transactions, although yields may soften as a consequence of wider macro-economic factors.

• Occupancy should fully return to pre-pandemic levels by year-end.

• Workforce challenges and cost inflation are likely to remain as the two key operational headwinds.

• Possibly more signs of distress emerging, particularly for smaller older style assets which are reliant on local authority funding.

Advice for providers

If you’re considering a sale, our advice is to engage with your agent, accountant and solicitor well in advance to ensure your care home is positioned correctly to achieve the best price. Appointing an experienced team of advisors will ensure your interests are protected and the sale process is as smooth as possible.

If you’re looking to buy, it is key to explore your funding options early on. Our sister company, Christie Finance is one of the leading brokers in the healthcare market. They are able to navigate the challenging funding market and offer a whole-of-market approach to ensure the most competitive funding package is brokered.

For further insight on the care market in the UK, read Christie & Co’s Business Outlook 2023: Finding Clarity report at christie.com/business-outlook-2023

Rob Kinsman is the Regional Director – Healthcare at Christie & Co. Email: rob.kinsman@christie.com Twitter: @ChristieCo

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Tackling it together:

How can care providers successfully navigate energy contracts?

Care providers are rarely experts on gas and electricity and therefore rely on energy suppliers or brokers to offer advice. Care England wanted to establish whether they are supporting providers or are seeking to exploit them. To investigate, we launched an exercise to explore how we could best assist providers with their energy choices and options.

Focus Energy Services Ltd, a Care England partner for SME energy options, reviewed over 17,000 energy bills, with findings which indicate that some energy suppliers and brokers are perhaps not always acting with transparency. As such, Care England is offering the following advice and guidance on how to renew energy contracts.

Broker commission

Brokers should be happy to disclose the commission that is hidden with the energy price per kWh and any other fees, if not for the sake of transparency, then for the possible litigation they face for not doing so.

Larger providers often use energy consultants and may purchase energy throughout the year, hedging volume and buying at the right price at the right time to align with the organisation’s risk profile. Consultants may charge an uplift on the kWh rate for their advice and guidance, which can be higher than energy brokers but should be offset by the money saved based on the advice provided.

But what about the smaller care providers who rely on energy brokers? This is where we saw some exploitative behaviour in the review of over 17,000 bills collected as part of the energy options review (these invoices covered 403 legal entities and 2,721 supplies (meters) and 19,433 rooms plus day centres, head offices and other care services.) One care provider was quoted 2p per kWh for a 12-month contract, four times higher than the maximum commission we would expect to see from a broker, for all but the very smallest consumption.

Some brokers push two and threeyear contracts to try and lock in the care business and secure commission. In the last six months, most responsible brokers would be unlikely to suggest long-term contracts given the Government Energy Relief Scheme uncertainties and due to the peak prices caused partially by the shortages in gas supply in connection with the war in Ukraine.

Care providers have the challenging task of negotiating energy contracts during a time when suppliers are seeking to capitalise on new and existing business. Richard Ayres, Senior Social Care Advisor at Care England, shares valuable advice on how to review options and contracts effectively.

Care England believes energy brokers should not exceed 0.5p per kWh for commissions for very small contracts which should scale down as contract values increase.

VAT

VAT on energy for residential care is capped at 5%. Of the 17,000 energy bills examined, Focus Energy Services identified 18% of the providers were charged VAT at 20% together with the Climate Change Levy. Focus Energy is now assisting providers to recover circa £3.5m in VAT overpayments. VAT recovery can generally go back six years in England and five years in Scotland. If providers are part of the Care England Tender, Focus Energy Services will manage the VAT and Climate Change Levy recovery for providers without charge. Why are these errors being made? The reasons are threefold:

• Brokers sometimes not understanding the care sector when advising care providers. These are often smaller more salesoriented brokers rather than consultative brokers.

• Expired VAT certificates. Best practice should be that new VAT declarations should be sent in month 11 for contracts over 12 months.

• Brokers not checking the first bill for new contracts for errors. These overcharges will not be picked up if contracts renew with brokers who are not taking these actions.

Energy Bill Relief Scheme (EBRS)

Why do 9% of care providers have the wrong EBRS discount applied? This is complex for many smaller energy consumers to calculate, and the fault lies with the energy suppliers. Brokers that actively manage contracts should be reviewing bills regularly to ensure this is not the case. The loss of discount can cost care providers hundreds or even thousands of pounds depending on the scale of discount error.

KVA ratings

A KVA rating is the maximum demand of electricity a business may use. If the rating is higher than needed, the provider pays more than necessary for any unused capacity. Caution is therefore required prior to reducing KVA ratings and this should only be undertaken after thorough research by the broker and questions asked of the provider. Some brokers may charge a fee for these services, usually a percentage of the savings for the first 12 or 24 months.

Comparing energy quotes

Under OFGEM rules all energy brokers should be offered the same rates by energy suppliers so the only differential should be the commission they charge, or for additional services offered; this is why Care England created the care sector energy options review. So, what should care sector energy consumers look out for?

• Most quotes are provided prior to the energy suppliers carrying out credit checks accordingly; it isn’t possible to guarantee the rate offered until the energy supplier has ‘locked in’ or accepted the contract which is determined by the credit rating

of the care provider.

• Another tactic used is the kWh rate and standing charges (the daily charge) which can change depending on the credit score of the purchaser. If care providers are offered a rate prior to a credit check, there is no guarantee they will be able to secure it.

• Energy prices fluctuate daily and sometimes during the day; caution is required when comparing quotes, as different dates can imply the older quote is cheaper, when the price may have changed.

• Some brokers sell contracts for longer periods to earn more commission. Shorter term contracts should be considered in more uncertain times.

• Quotes should be checked to ensure the same usage figures. Brokers should confirm the source of the usage data used, ideally obtained from the current supplier. ‘00’ meter figures (often called half hour meters) can take up to a week to obtain, so a quote provided in less than a week should raise some questions in relation to the validity and source of the data used.

• Again, for best practice brokers should ask the following to obtain the most accurate quotes and help to ensure tolerance penalties are avoided:

1. Is solar likely to be installed within the term of the contract?

2. Is the laundry being insourced or outsourced and, again, is this likely to change within the contract duration?

3. Are you using or changing to LED lighting?

4. Are you extending or closing part of the property?

5. Are you intending to install any other energy saving products?

6. Is there anything which could significantly increase/decrease your energy usage within the period?

Terms and conditions

It is essential that energy consumers review terms and conditions with energy suppliers and brokers for additional charges, fees, commissions, restrictions, and service levels. Too often consumers are unaware of these until enforcement. Many energy suppliers have a volume tolerance clause which penalises for under/over usage meaning it is critical that an accurate usage is stated on quotes, or that this provision is negotiated out of any contracts by the broker.

Care providers who use energy brokers should consider the advice in this article and be clear upfront on what their broker will do for their commission. A good broker will secure the best available contract at any given time for care providers and try to ensure they do not experience any of the issues previously mentioned. Brokers will also be able to provide advice and guidance to assist the provider to decide on the most appropriate contract term within their reasonable commission. Care England uses Focus Energy Services to source the market for the lowest possible energy prices and encourage all care providers to challenge brokers on each of the points raised.

If you would like to participate in the next Care England energy options review and join the next energy tender, you can register your interest at www.careengland.org.uk/energy or by contacting Focus Energy Services by email at david@focusenergyservices.co.uk

Balancing the books: How to cut costs but not quality

Social care providers experienced inflation of 10.5% in December 2022 across many areas of running a business. The cost of temporary labour agencies has risen between 175% and 400% in the last two years; the price of property, food, insurance, medical consumables, medical equipment and cleaning products have all increased at unprecedented levels. This continued rise in cost has had a significant impact on care provider viability. Also, with energy costs at an all-time high, providers have seen overall costs quadruple in the last two years.

Cut cost not quality

To combat the impact of inflation, it is important that cost-cutting activity does not compromise quality of care and considers professional procurement to deliver a fair, competitive and value-formoney remedy.

The first step is how to cut and, in some rare cases, stop consumption. This is referred to as a ‘demand side’ solution. One cannot stop buying food in social care; however, with food wastage as much as 12%, portion control is key to minimising waste whilst not underestimating the importance of quality. Restrictive storage can dictate pack sizes, thus negotiating split pack prices is critical. Cutting energy consumption can deliver material savings but must not compromise the comfort of residents. The same holds for temporary labour: improving permanent recruitment lessens the need for temporary staff and is critical to safely cut agency hours.

Temporary labour costs

Labour is the single largest cost to care providers who are deeply concerned about ongoing resourcing costs, especially

temporary labour, because of the principal risk to the quality and continuity of care and high cost. This is especially key given labour accounts for between 60% and 80% of care provider income.

How can you cut agency costs?

First, review the ‘demand side’ actions: for example, pay review, permanent and alumni recruitment, refer-a-friend schemes, an efficient ‘attraction to onboarding’ process, improved rostering systems, training around resource planning, converting temporary to permanent and bank team optimisation. Once addressed, there is a high probability a reduction in temp agency spend will materialise.

When attracting care workers you must consider the age demographic of the existing workforce. Is there an age demographic which you are struggling to recruit and which you want to attract? If so, then consider introducing new shift patterns with greater flexibility. Great permanent recruitment must deliver high retention levels, therefore attracting applicants who have an affinity with care is essential.

Marr Procurement forecasted a year ago that a recession would lead to an increase in the availability of care workers keen to return to the world of care or keen to try care for the first time. Recently, thousands of jobs in non-essential sectors have been made redundant and this creates a perfect opportunity for care providers to capitalise on new potential care workers, by ensuring their permanent recruitment campaigns are effective and efficient. This is vital given successful permanent recruitment will lessen the need for temporary staff.

A good temp agency can play a key role by providing access to skilled labour at short notice, the issue being temp agencies have become necessarily habitual. Addressing the cost of temporary labour agencies can be addressed in three ways:

1. Introducing standard contracts where agency margins are reduced to sensible levels.

2. Creating a fulfilment capability helping hiring managers find temp staff.

3. Introducing technology by way of an online timesheet, which provides invaluable data to control consumption as care worker pay must not be negatively impacted to ensure quality of care is protected.

The most successful care providers adopting this approach to resourcing have cut the number of temp agency hours and the cost per hour.

Catering in care

The cost of living crisis is putting care providers under pressure. Inflation is now at its highest level in 40 years and food cost is devastating parts of the care sector.

A leading food distributor recently announced, ‘In the last six months, the cost of living crisis has exacerbated already volatile market conditions, which also reflect the extreme weather that was felt across Europe in the latter half of 2022. Despite the volatility we’re still seeing, we are starting to see price inflation and availability stabilise on some categories and ingredients. However, this could easily be offset by the impact of poor harvests caused by the dry

The cost of living crisis is impacting on goods and services in the social care sector. Christoph Marr, Founder and Managing Director of Marr Procurement, explains what providers need to consider in view of escalating costs.

weather last year or China coming out of its lockdown and putting pressure on demand across markets worldwide.’

Below is evidence of the volatility regarding food inflation pressure leading up to Autumn 2022.

The Consumer Price Index (CPI) for food and non-alcoholic beverages is one of the main drivers and continues to rise to 16.8% higher than a year ago, the highest level in just over 40 years. That said, the CPI is forecast to gradually decline in 2023 but experience tells us this is unlikely to translate into lower prices for some time.

Dairy is finally seeing price reductions across butter, skimmed milk powder and cheese. Conversely, the cost of milk remains high. Last year saw a big increase in poultry prices due to the Ukraine conflict, inflation and the energy crisis. Meat and poultry prices fell off slightly in November but were still significantly higher (20-40%) than at the start of 2022. The area to watch when buying poultry is not just the feed price but also the Polish live bird price, given Poland is Europe’s largest poultry exporter. While poultry prices have seen some recent stability, avian influenza remains a volatility risk.

How can food prices be reduced?

The cost per resident per day ranges from £4 to £10 depending on the care provider resident mix. When sourcing food, the focus must be on quality, provenance, traceability, sustainability and supply chain reliability. Price stability is vital and keeping prices under control wherever possible is crucial as the last 12-18 months have seen significant inflation on all areas – frozen, ambient, chilled, fresh and dairy.

Creating a trusting relationship with a food supplier is pivotal and means you will be briefed in advance of inflation, thereby allowing time to proactively identify and swap to credible substitutes. This relationship helps to ensure that, when wholesale food prices fall, it is more likely to result in lower food costs.

Running a competitive process to identify a trustworthy food supplier is vital to efficient food procurement. It is recommended that a competitive process for a frozen/ambient/chilled provider and a separate tendering process for areas such as fresh and dairy will see the most efficient outcomes. A small number of providers can

combine all food categories, but it is rare. Having a food supplier with a good-quality nutritional software package is key to aid menu design. In terms of costs, pre-COVID-19, providers could secure a price stability agreement; however, given current market volatility, this is now unusual.

It’s important to involve service users in tasting sessions and to ensure that a comprehensive list of alternatives/ substitutes has been agreed as part of the contract. If substitutes are needing to be made, then action can be taken quickly without impacting on nutritional content, costs and consumer satisfaction.

Help is at hand

Marr Procurement is the values-led care sector procurement specialist; in eight years we have delivered over 200 cost cutting sourcing projects across the UK involving hundreds of millions of

pounds of goods and services. We reduce operating costs for care providers without compromising on quality and we do so with integrity and we are delighted to be working with Care England to provide a new and innovative initiative to bring down operating costs across the care sector. For more information or to speak to Care England, contact rayres@careengland.org.uk

Christoph Marr is the Founder and Managing Director of Marr Procurement. To contact the team, email:

NOT UP STACKING

The financial pressures affecting homecare providers

The Homecare Association has published its minimum price for homecare for April 2023 to March 2024. Dr Jane Towson OBE, Chief Executive of the Homecare Association, explains how high inflation rates are impacting homecare providers and details the current challenges for the sector.

The average rate being paid by public organisations for homecare continues to be significantly below the cost of recruiting and retaining a skilled workforce and delivering high-quality, sustainable homecare services. To help providers to negotiate with local councils and NHS commissioners, every year we publish our Minimum Price for Homecare to explain what makes up the cost of delivering quality care. Not only does this set out what makes up

the minimum amount needed to provide quality care, it also sets out how provider costs have increased over the year.

Sky-high prices

This year’s calculation for England is £25.95 for a National Living Wage Rate of £10.42, this represents a 12% increase on the rate for 2022-2023. The direct care worker costs are calculated at £17.97, with business costs

such as the cost of the registered manager, recruitment and regulatory fees making up the rest.

High inflation rates are having an impact on all households and businesses. Indeed, the CPI inflation rate peaked at 11.1% for October 2022 and remains high. Homecare providers are no different from other businesses in experiencing inflationary increases in costs, from higher wage bills to the sky-high price of fuel to rising rent, rates

and utilities – all impacting on this year’s Minimum Price for Homecare.

Staffing costs are by far the most significant driver of the cost of delivery of homecare. Increases in wage rates do not just impact on the rate for care workers’ contact time, but also result in rises to associated on-costs such as statutory pensions, National Insurance, holiday and sick pay. Moreover, there is a knock-on impact on salary differentials and wage rates for roles including office staff.

Recognising talent

The National Living Wage is set to increase by 9.7% to £10.42 in April 2023, the largest ever rise since its introduction. Combined, this has led to the significant increase in the costs of delivering care.

The costs of running a care service are heavily influenced by the requirement on registered providers to meet legal obligations to ensure the safety and wellbeing of the people they support. We, therefore, strongly caution state commissioners against underestimating costs in a bid to reduce the total hourly price paid for care.

The homecare workforce is highly skilled, responsible and committed. We strongly believe that care work should be fairly recognised and rewarded. To reflect this and encourage commissioners to think about the cost of delivering care when care workers pay is increased we calculate the minimum costs of delivering care at different wage rates ranging from the Real Living Wage Rate (£10.90) at £26.79 to a competitive labour market rate (£13.64) at £31.56.

Council complications

Earlier this year councils published the Cost of Care report, which explores the average costs for providers in their areas. The idea that public sector commissioners should pay rates for care that cover costs is a good one. Indeed, we believe it should be unlawful for public sector organisations to purchase care at rates below the costs of compliance with employment and care regulations and of running sustainable services.

The exercises looked at the costs many providers faced a year ago, without

exploring what increases in cost might improve the quality of care delivered. Added to this, there is little done to examine how the volume of hours delivered might impact on provider costs, and commissioning small numbers of hours from a large number of providers could impact on the market sustainability and the overall costs.

While some exercises ended up at a rate that we believe barely covers the care worker costs last year, let alone the costs of running a care business, many councils published median rates above their current costs.

We have long argued that the cost of delivering care is also sensitive to length of visit, with short visits resulting in proportionately higher operating costs. This is due to the relative influence of travel time, which counts as working time for National Minimum Wage purposes and thus must be covered. State-commissioned homecare visits are typically 30 minutes in length. In some areas, the proportion of 15-minute calls are increasing, adding to costs.

We were pleased to see that a number of councils looked at the additional costs of the delivering care at 15, 30 and 45 minutes, acknowledging that the median rate for these visits would be higher.

Cost of care

We would encourage all providers to use both our minimum price and the councils’ cost of care exercise to negotiate their fee rates, remembering that the cost of care reflected costs last year, before rising inflation and the significant uplift in the National Living Wage.

Right now, there are insufficient care workers to support people to live well in their communities. Many factors, both long and short-term, influence retention and recruitment of homecare workers and thus workforce capacity. Inadequate Government investment in state-funded homecare and poor commissioning practices have led to low pay and substandard terms and conditions of employment.

The sector has also been adversely affected by tightening of labour markets, pressure on supply chains and rising energy costs all contributing towards

increased inflation. This has led to a rapid rise in business costs and cost of living, placing further pressure on low-paid workers and their employers.

Inadequate capacity is contributing to greater burdens on the NHS, including more people with deteriorating health; longer ambulance waits; inability to respond fast to all emergencies; cancelled clinics; cancelled operations and difficulty in reducing waiting lists.

Demographic pressures of an ageing population, added to the impact of COVID-19 on population health means that we are going to need more care workers to support people, and that the gap between demand and supply will only get worse.

Our members tell us the ability to recruit and retain staff is the biggest constraint on their ability to increase capacity. It is low fee rates paid by councils and the NHS that prevent providers from increasing care worker pay and terms and conditions of employment.

Still work to do

The approach by too many commissioners has been a race to the bottom on the cost of delivering homecare. This cost-saving approach which effectively ‘salami-slices’ the different elements of providers’ operating costs is taking risks with the quality and safety of a regulated service. It also risks undermining the ability of providers to improve the working experience of care workers, thereby further destabilising the workforce.

In some areas, there is evidence that tendering contracts at unsustainable fee rates from the outset can lead to greater cost to commissioning bodies over the lifetime of a contract – particularly if this results in heavy reliance on spot-purchasing at higher fee rates, handing back work or entire contracts and provider failure.

The Homecare Association will continue to challenge central Government on the overall funding of social care. It is, however, councils, the NHS and Health and Social Care Trusts (in Northern Ireland) that are responsible for determining the prices they pay for homecare services at a local level.

Dr Jane Townson OBE is the Chief Executive of the Homecare Association. Email: jane.townson@homecareassociation.org.uk Twitter: @drjanetownson

RESOURCES

Online

Associated Retirement Community Operators

The main body representing housing-with-care providers in the UK.

Web: www.arcouk.org

Association for Real Change

A third sector and membership organisation supporting providers of services to people with a learning disability and/or autism.

Web: www.arcuk.org.uk

Association of Mental Health Providers

The leading representative body for voluntary, community and social enterprise mental health organisations in England and Wales.

Web: www.amhp.org.uk

Care England

Membership association body representing independent care providers.

Web: www.careengland.co.uk

Care Management Matters

Resource directory including accounting and financial specialists, policy funding analysis and more, as well as thought-leadership articles on best practice on managing business costs and staffing.

Web: www.caremanagementmatters.co.uk/ directory

Care Provider Alliance

Brings together the main national associations, collectively representing the whole adult social care sector to ensure a co-ordinated response to the major issues that affect it.

Web: www.careprovideralliance.org.uk

Carterwood

Providing data and analysis for elderly care homes and retirement living. Carterwood’s commercially focused team is one of the largest dedicated to health and social care.

Web: www.carterwood.co.uk

Care Workers’ Charity

Advancing the financial, professional and mental wellbeing of social care workers by making grants, signposting to resources and providing access to services.

Web: www.thecareworkerscharity.org.uk

Christie & Co

A leading specialist advisor for buying and selling businesses in the following sectors –hotels, pubs, restaurants, childcare, healthcare, convenience retail, leisure and medical.

Web: www.christie.com

Focus Energy Services

Awarded a ‘Preferred Supplier’ status to a national care sector organisation with over 400 members and over 1,000 trade premises. If you would like a no-obligation chat about your business and your procurement choices (even if you are still be in your current contract for some time) then contact Focus Energy Services.

Web: www.focusenergyservices.co.uk

Homecare Association

The only membership body in the UK dedicated to supporting homecare providers.

Web: www.homecareassociation.org.uk

Marr Procurement

Marr Procurement has experience of buying

a wide range of goods and services, including insurance services, professional services, temporary labour agency services, all areas of indirect procurement, (i.e. goods not for profit), and a large number of ‘goods for profit’ spend areas.

Web: www.marrprocurement.com

National Care Association

Representing small- and medium-sized care providers and affiliated local associations, National Care Association liaises with national and local Government and key stakeholder groups including the Care Quality Commission.

Web: www.nationalcareassociation.org.uk

National Care Forum

The membership organisation for not-for-profit organisations in the care and support sector.

Web: www.nationalcareforum.org.uk

Registered Nursing Home Association

The Registered Nursing Home Association is the only national association exclusively representing the interests of owners of SME care homes with nursing.

Web: www.rnha.co.uk

Social Care Institute of Excellence (SCIE) CPD-accredited training, consultancy and free e-learning and videos.

Web: www.scie.org.uk

Voluntary Organisations Disability Group VODG is a membership body representing over 100 organisations within the voluntary sector who work alongside disabled people.

Web: www.vodg.org.uk

Montane Finance is a specialist, independent broker supporting healthcare.

Whether you are an existing operator looking at the refinance and expansion of your care group or a new entrant looking at the acquisition of your first home, Montane Finance will be on hand to support you through your journey.

A market leading service built on clear, honest and precise values

Award winning, extensive and demonstrable track record of success within healthcare

Independent, impartial and personal

Unique access to sector specialist helathcare lenders

“Montane Finance provide a market leading service

A. Ahmed, Owner

“Without the support and knowledge of Montane Finance, this deal would not have gone through as seamlessly”

What our clients say: Reach your peak.

D. Hignett, Owner

T 07484609912

E scott.murcott@montanefinance.co.uk

montanefinance.co.uk