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Charities are being forced into subsidising the health and social care system

In this blog, former Carers Trust CEO Gareth Howells casts a forensic eye over the true cost of providing care to people in their own home – and what care commissioners are prepared to pay. He finds that all too often Carers Trust’s Network Partners are being commissioned to provide these vital services at a loss.

Nothing angers me more than when people commissioning local care services say ‘charities can do it cheaper’. 

And believe me, it’s something I’ve heard repeatedly over the last few years. 

But before we get on to just how much charities like our Network Partners need to provide care services, let’s be clear on what we mean by ‘providing care’.

Many Carers Trust Network Partners are registered with the Care Quality Commission (CQC) in England or Care Inspectorate in Wales (CIW) to provide short-term care for people in their own home. The service is vital. It means carers – people caring, unpaid, for a relative at home - can take some much-needed time out to recharge their batteries and have some time to themselves. 

Our Network Partners deliver this ‘respite care’ by way of a contract with their local social services department or local health board. They get paid for every hour of care they deliver. It may be that a carer needs a two-hour break from their caring role so they can get their hair cut and pop to the bank. If that’s the case, one of our Network Partners will be paid for providing a qualified, experienced staff member to provide care for the person who needs it for those two hours. 

The problem is that views vary wildly on how much our Network Partners - and other charities providing this type of respite care - should be paid by those commissioning the service.

So let’s start with what the United Kingdom Homecare Association (UKHCA) says. From April onwards, it recommends the absolute minimum a provider of this support should receive is £20.69 per hour. For those of you who don’t work in this arena, this is how the UKHCA breaks down that hourly total: 

  • £8.72 – to pay the minimum wage for the care worker from April 2020.
  • £1.72 – to pay the time it takes for someone to travel to the home of the person. 
  • £1.36 – to reimburse the mileage costs of the staff member travelling to the home
  • £3.11 – to pay national insurance costs, pension costs, apprentice levy and training etc. 
  • £5.20 – to run the payroll, to pay the payroll team, to pay the HR department, to have an IT system, to buy equipment, to provide reports to funders, to have a quality award as instructed by the local authority, to have an audit each year, to pay the rent, gas and electric, to pay small management teams plus much more!
  • £0.60 –profit – As charities, our Network Partners don’t make profit, so lets round it off at £20 per hour!
  • £20.69 – Rounded off at £20 per hour.

All of this may sound perfectly reasonable.

But in all my discussions with the Carers Trust Network Partners delivering this service, it turns out not one of them is receiving anywhere near £20 per hour. In fact, some are receiving as little as £14.50 per hour. 

It’s unforgiveable. You simply cannot provide a quality, cost effective service at £14.50 an hour. 

Just to get a member of staff to the door and provide an hour’s worth of care in someone’s home costs a minimum of £14.91. 

And that’s without all the other overheads met by a charity delivering this service: IT, administering payroll, a Care Manager’s wages and yes, a charity providing care services really does need an office from which to operate. Then there’s the cost of an annual audit, not to mention a finance team to send the invoices, and pay all the other inevitable overheads like electricity and continual adverts for new care workers. 

If all this sounds like special pleading, I can assure you it’s not. I worked in one of Carers Trust’s Network Partners in South Wales for four and a half years - time enough for me to have learned it’s almost impossible. It made my head hurt every single day and it’s why so many charities who provide this care - and private providers of home care for that matter - are closing. 

You’d think that, with all this in mind, those commissioning care services at a local level would at least show some pragmatism.

Not a bit of it. When my colleagues challenge local commissioners over cost they are met with a barrage of reasons for not being able to increase the hourly rate: ‘we don’t have enough money’, ‘budgets are tight’, ‘we have to do more with less’ and of course that tired old mantra: ‘charities can do it cheaper’. 

How? If someone can tell me precisely how charities can pay less than the minimum wage, how they don’t have to pay national insurance and pension contributions, how they can survive without an IT system, don’t need an annual audit as instructed by the Charities Commission and Companies House and don’t need to pay their bills and run the organisation – then I’d love to hear from them!

In fact, I sometimes wonder whether commissioners understand that charities are employers too, with all the obligations and overheads of any other organisation trying to balance the books. They can’t even recoup their VAT most of the time! 

For now at least local charities providing care services are just about managing to survive. But only because they work to raise money elsewhere - finding individuals, trusts and foundations who will donate to them and working tirelessly to make sure that profit is not driving the work they do. 

Put another way, charities are being forced to step in and raise money to subsidise a health and social care system that should be sustainably funded by the state. 

And let’s be honest, charities are being forced to do this because, for too long now, successive governments have failed to develop a sustainable solution to the crisis in social care funding. All of which means charities are between a rock and a hard place. They can’t say no to these contracts because if they did they would have to close - with all the terrible consequences that would have for unpaid carers unable to receive the much needed respite that they deserve and need. 

This is why I hate that phrase I started with. Charities delivering care in someone’s home are being taken advantage of because commissioners have turned the mistruth that ‘charities can do it cheaper’ into an article of faith.

It must stop. And it will only stop once government discovers the political will to find a long-term funding solution for social care. Next week’s budget will provide the first indication of whether this government really has the will to find such a solution – a solution desperately needed by millions of voters who recently gave the government a clear majority to act. 

Without such investment, the UK’s social care funding crisis is only going to get worse. 

Gareth tweets at @garethhowells09 

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