Survey reveals banks with ‘no appetite’ for social care sector

Consumers Feel The Pinch With Christmas Around The Corner

Senior care leaders have warned that care homes are facing a funding crisis due to banks refusing loans over fears about the sector’s viability.

A survey by the Hampshire Care Association (HCA) reported by The Guardian found 20% of members had been told that their banks were concerned about their long-term viability. Some members were told their bank had “no appetite for the care industry”.

Andrea Pattison, HCA executive board member, said: “This isn’t just an issue for one or two banks or one or two providers. The majority of the sector is made up of small and medium-sized businesses, and the government needs to step in to stop banks from foreclosing viable businesses, imposing adverse conditions or withdrawing funding.

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“A failure to do that would be a threat to the adult social care sector overall and by extension the NHS, who rely on us to deliver great care.

“It was a shock to hear providers saying their banks weren’t interested in social care as a sector. That was intensely concerning.”

Commenting on pressures on providers elsewhere, Nadra Ahmed, chair of the National Care Association, said: “We haven’t seen surveys but I know these conversations are beginning to be held across the country with all banks. Some a bit more aggressive than others. Definitely we are hearing that providers are beginning to feel the pressure.”

The findings come with care home providers set to face further financial pressures with the Infection Control Fund due to expire at the end of this month and energy prices expected to double for many this winter.

A spokesperson for banking representative, UK Finance, said: “Lenders understand the current pressures on the social care sector and are actively providing support for viable businesses. As responsible lenders, finance providers will regularly be in touch with their customers to check on their status and see if any assistance may be required.”

A government spokesperson said: “We are committed to the delivery of world-class social care and the new £5.4 billion funding for the sector will put in place comprehensive reforms that are sustainable and fit for the future.

“We have also provided councils with access to over £1 billion of additional funding for social care in 2021-22.  This will support councils to maintain care services while keeping up with rising demand and recovering from the impact of COVID-19.

“In addition to this £6 billion has been made available to local authorities to address pressures on their services, including support for the social care sector.”

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The author Lee Peart

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