A first of its kind survey on social care pay has revealed that inadequate and unsustainable local authority (LA) fees are bringing the sector to breaking point.
One third of providers (32%) said they will be cutting LA placements in 2017/18 due to a combination of rising staffing costs and falling profits, Care England found.
For the next three years, the number of providers saying they will cut LA provision rose to 45%.
The survey found that 96% of providers expected their overall staffing budget to increase this year and all expected further increases over the next three years to keep pace with demand. Staffing budgets make up the bulk of costs for providers.
Only 10% of providers expected profit margins to increase in 2017/18. This slightly increased to 15% projecting an increase in profit over the next three years. Conversely 55% of providers projected a fall in profits up to 2020.
Professor Martin Green OBE, Chief Executive of Care England said: “Care England’s survey makes is clear that providers are expecting higher staffing costs and falling profits whilst demand continues to increase.
“In order to manage this, providers are anticipating fewer Local Authority placements while investing in technology and services to respond to demand.
“The sector can and must adapt, but dynamics are shifting and unless Local Authorities pay the commensurate rate to providers there will be a lack of capacity for Local Authority funded residents and the ongoing workforce challenges will not be addressed.”