Care homes face a credit crunch as banks refuse to lend money or provide new services for fear the care sector will collapse, senior care officials have warned.
A survey of healthcare providers in Hampshire found that 20% of them had been told their bank was concerned about their long-term viability. Several said their bank said they had “no appetite for the care industry” and refused basic services such as additional accounts.
Nadra Ahmed, president of the National Care Association, said providers elsewhere were under similar pressure. “We haven’t seen any investigations, but I know these conversations are starting to take place across the country with all the banks. Some a little more aggressive than others. We certainly hear that the suppliers are starting to feel the pressure. “
Health care providers are reluctant to reveal problems to their local government clients or the Care Quality Commission for fear of being subject to special measures or losing care contracts. Almost half of the care homes that responded to the Hampshire Care Association (HCA) survey said they feared the current crisis would put them in a high risk position with their bank or lender.
A fifth said their bank or lender had been in contact to raise these concerns directly. While some banks were supportive, others put pressure on them, including sending out “threat letters,” one provider said, expressing concerns about the long-term viability of care providers.
The report cited providers as saying that banks did not want to work with adult welfare organizations. “[We were] said the bank has no appetite for the care industry, ”a provider said. “[They raised] is about the longevity of nursing homes as a viable business, ”said another.
Andrea Pattison, HCA board member who conducted the survey, said: “It’s not just a problem for one or two banks or one or two vendors. The majority of the sector is made up of small and medium-sized enterprises, and the government must intervene to prevent banks from closing viable businesses, imposing unfavorable conditions or withdrawing financing.
“Failure to do so would pose a threat to the adult social care sector as a whole and by extension the NHS, which relies on us to provide good care.
“It was a shock to hear providers say their banks were not interested in social protection as a sector. It was extremely worrying.
Ahmed said the crisis in social services was becoming more and more acute. “Any resilience that vendors had, before Covid, has been eroded due to the fiasco around PPE and everything we went through before funding was available,” she said.
On September 30, the Infection Control Fund, a £ 600million jar to pay for PPE for social care companies, will end. “We don’t know yet if this will continue,” said industry body Care England.
The gas price crisis and labor shortages are also putting pressure on social services, Ahmed said. “The heat does not come on in a care facility,” she said. “It’s time to take stock. Urgently, the health secretary must consider creating a sustainable social services market and closing the gap between resources and demand – not just money but also labor. They are exhausted and anxious and are offered better paying jobs as Amazon delivery drivers. “
The investigation comes after months of concern in the industry that insufficient financial assistance during the Covid pandemic will see care homes and home care providers shut down, leaving vulnerable people without care.
Liberal Democrat analysis shows social services are facing a £ 1.7 billion Covid black hole. Local authorities in England have spent £ 3.2bn on adult social care in the first year of the pandemic, with the money being spent on PPE, additional workers and additional demand. Yet they have only received £ 1.49 billion in additional funding for Covid-19 from Westminster, according to Lib Dem figures based on research from the House of Commons library.
“More than 1.5 million people are now deprived of the care they need and many are stranded in hospital, unable to leave because follow-up care is simply not there,” the spokesperson said. from Lib Dem for Health, MP Munira Wilson.
UK Finance, which represents the banking industry, said the survey did not reflect its conversations with people in the industry. A spokesperson said: “Lenders understand the current pressures on the social care industry and actively support viable businesses. As responsible lenders, finance providers will be in regular contact with their clients to check their status and see if assistance may be required. “
The government has said it will encourage banks and lenders to take a flexible approach to their customers. Local authorities would have access to sustainable funding for core budgets when reviewing spending.
A government spokesperson said: “We are committed to providing world-class social care, and the new £ 5.4bn funding for the sector will put in place comprehensive reforms that are sustainable and fit for the future. . “