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Looming care collapse will add £3bn to NHS costs – think tank

The NHS will have to cope with an extra £3bn pressure as struggling care homes face the prospect of losing up to 37,000 beds over the next five years, a think tank has said today (11 November).

The ResPublica Trust argued that an imminent care collapse would force the NHS to care for patients forcefully removed from residential providers. It compared the imminent crisis to the 2011 collapse of the massive care homes operator Southern Cross Healthcare.

The think tank’s director, Philip Blond, said: “When Southern Cross failed, the private sector stepped in and cared for those left homeless. Now, however, with the sector losing money for every funded resident, there is no provider of last resort.

“We fear the worst case scenario is the most likely, that these residents will flood our local general hospitals costing £3bn per year by 2020.”

The 37,000 beds at risk in the sector would represent 28% of all available NHS beds, which are already suffering from shortages as it is.

The organisation estimates that the residential care sector will need another £1.1bn by the end of this Parliament to meet soaring demand. One-third of this figure would be needed to cope with the rise in staff pay because of the government’s national living wage, set to come into effect from April 2016.

Emily Crawford, author of the think tank’s report on the care home crisis, said: “The national living wage is a great step forward. It is estimated it could help more than six million low-paid workers.

“But for the care sector, which is heavily reliant on its labour force, it could be catastrophic.”

A significant element of this looming collapse is the country’s ageing population, with people over 65 set to make up 25% of the population by 2050 – a rise from today’s 18%.

The think tank also highlighted that 70% of the total health and care spend in England is on long-term conditions, meaning 30% of the population accounts for the majority of the spend.

And most local authorities now only provide funding for older people with ‘substantial’ or ‘critical’ needs, having made eligibility criteria much harsher in recent years, meaning the amount of people getting financial help for social care has dropped by 27%.

GMB, the union representing many care sector staff, backed the report, with its national officer, Justin Bowden, saying: “It is one minute to midnight for the care sector. This time, however, we are not just talking about the largest care home provider collapsing, but the entire publicly-funded care home and domiciliary care sectors.

“This is not some unexpected, overnight phenomenon catching everyone unaware, this has been a slow motion collapse and somebody’s mum or dad or granny – our elderly and vulnerable – will be the biggest victims.”

And Dr Chai Patel, executive chairman of HC One, one of the largest care providers in the UK, stressed that Osborne must take urgent action to address the issues brought to the surface in the report.

“Southern Cross was a failing company – what we are facing now is a failing system. At a time when the baby boom generation is beginning to retire, and look ahead to their long-term care needs, there are huge fears that the homes to care for them simply won’t exist.

“We must protect the homes of vulnerable older people, and our NHS, by ensuring they are properly funded for the future,” Patel added.

Similarly, Cllr Izzi Seccombe, the Local Government Association's spokesperson for community wellbeing, said: "The adult social care system is in crisis and behind the numbers it is the people who rely on care to go about their daily lives who will feel the impact through the unnecessary stress and upheaval this could bring. 

"Health and social care leaders widely recognise that a properly funded social care system is essential to alleviate the pressures on the NHS. Without proper funding councils are going to be left struggling to keep people out of hospitals and in their own homes and communities.

"It is imperative that the government fully addresses this in the Spending Review before we see a care disaster unfold."

The report comes just a day after revelations from the CQC that more than 40% of social care providers are failing across England as the need for ‘special measures’ begins to permeate the sector.

And it comes just a few days after calls from influential people – such as those involved in the groundbreaking Barker Commission and the NHS Confederation’s chair, Stephen Dorrell – urging the government to merge the NHS with the care sector to protect both.