Why we need to talk money

Amrit Dhaliwal, chief executive of homecare provider Walfinch, looks at why care operators need to build sustainable, ethical businesses which make a profit in order to pay carers fairly and provide quality care.

Profit. There, I’ve said it. For too many businesses in the homecare sector, profit has been something of a dirty word.

Everyone in the care sector talks about the importance of high-quality care –and they are right – but we should not be ashamed to talk about money too. Because without making a profit we can’t deliver quality care – in fact we may not be able to deliver care at all.

We are not in the care sector for the money, but money is the lifeblood of any industry, and the care industry is no different. It enables care providers to hire qualified staff and pay them properly, purchase necessary equipment and supplies, and keep facilities running smoothly.

It’s our responsibility, too I’m not just talking about funding from local authorities and the NHS, though it is not enough, partly because the money they receive from the government falls short of what’s needed.

I’m talking about how care sector businesses approach the issue of money themselves.

Some homecare businesses focus too little on money. It’s bad business practice, but worse, it can endanger their services to clients. The overall average rate offered by local authorities and the NHS is £18.57 an hour, but we have heard of some offering only £13 an hour. This is not enough to pay carers a decent wage and run a sustainable business that makes even a modest profit.

The importance of saying “No” Faced with unsustainable rates, providers must not be afraid to say “No”. Yes, it sounds callous, and we all hate doing it, but realistically, if we don’t make a decent income, we risk restricting the quality and growth of our services. With more than 500,000 people awaiting social care, restricted growth is bad news for them and our businesses. We need to ensure that we have enough income to run a business capable of delivering a high standard of care. We can’t do that on ridiculously low margins.

The key to taking the guilt out of saying no is knowing the minimum revenue our individual business requires to operate a sustainable service. Any rate below that level is unacceptable.

A potential solution

At Walfinch, our franchisees typically

“Profit. There, I’ve said it. For too many businesses in the homecare sector, profit has been something of a dirty word.” serve a mixture of local authority, NHS and private clients.

Some of them are using one client group to effectively cross-subsidise another. The Homecare Association currently estimates the minimum cost of providing care is £23.22 an hour, so if, for instance, we charge private clients £30 an hour, then we are making enough profit –without being extortionate – to enable us to absorb or discount fees for those most in need. This goes some way towards ensuring that people need not go without the care they need.

There are no easy answers but without new ideas in the industry, quality of care will suffer. For the sake of our services, our carers and not least our clients, we must not be ashamed to talk about money.