Written evidence submitted by MHA (Methodist Homes) [SRF 029]

About MHA (Methodist Homes):  MHA is the largest charity provider of residential care for older people in the UK. Our mission is to enable people to live later life well by inspiring the best care and wellbeing at every stage of life.  We have over 75 years’ experience in creating communities that care with one of the highest quality ratings in the sector.  Through our 90 care homes, 70 retirement living communities and 60 community support schemes our 7,500 colleagues and 4000 volunteers provide care and support to over 18,500 older people across England, Scotland and Wales.

As a provider of care we work with over 177 local authorities and we face considerable challenges in terms of the varying approaches in the way they fund care, which in most cases does not reflect the true cost of care and how they commission services. 

Our CEO, Sam Monaghan, would be delighted to give oral evidence to the Committee about our experience at your convenience.

 

The current financial situation of councils, how this has affected their ability to deliver services and the demand for services, including Adult Social Care.

 

  1. Summary: Social care provision has been underfunded for decades, largely due to reductions in local government grant funding and an adult social care system that is no longer fit for purpose.  This has been exacerbated by Covid-19 which has had a disproportionate effect on people needing social care and the organisations providing that care.  The Infection Control Fund, whilst welcome, does not cover Covid-19 costs and the recent Spending Review (SR20) does not provide the funding required by the sector.  The social care sector is at crisis point and must be prioritised for reform and significant investment in order to ensure that this essential service is there for current and future generations of older people. 

 

  1. Local government is underfunded: The Local Government Association (LGA) reports that English councils will have had to deal with £15 billion of reductions to Government grant funding over the last decade and while they have met this challenge through efficiencies and transforming services[1], many services have been rationed, including adult social care where fewer people have been eligible for local authority support.

 

Further LGA analysis before the pandemic showed that adult social care costs were projected to increase by £1.3 billion each year from 2019/20 to 2024/25 simply to maintain 2019/20 levels of access and quality, factoring in demand and inflationary pressures, such as the National Living Wage.[2]

 

Before the Covid-19 pandemic, adult social care accounted for 38% of a local council’s budget.[3] However, local authorities have seen their spending on social care for older people reduce in real terms by up to 17% per person in some areas[4]. Due to this underfunding, fewer and fewer people are able to access support, in spite of demand for care and support continuing to increase. Indeed the Care Quality Commission found that 1.4 million older people were not receiving the care and support they need[5].

 

This lack of investment in social care has destabilised the care market, Covid-19 notwithstanding, with some providers leaving the market and people who need care therefore finding their choices limited[6].  The Association of Directors of Adult Social Services (ADASS) has identified a real danger that some councils could be unable to meet statutory duties, particularly amplified by the financial impact Covid-19.[7]

We can no longer wait for the government’s long-delayed adult social care reform to help us to bring an end to underfunding. The combined impact of long-term underinvestment, and the Covid-19 crisis means the sector needs proper funding now.

 

  1. Covid-19 impact: On the front line, Covid-19 has put unbearable stress on an already fragile social care system. We recognise that additional pressures are being put on councils’ budgets due to the ongoing pandemic, with many of them projecting a £4.4 billion spending shortfall, with £1.8 billion of that being generated by adult social care[8]. And while the Government has provided support to councils and to the adult social care sector through the Infection Control Fund, we do not believe those financial pressures have been fully understood. To illustrate, here is an outline of the financial impact on MHA:

 

Increased costs

       Earlier in the pandemic many of our frontline staff were absent from work through sickness, self-isolation and shielding, reaching a high of 13% (April to May), which has meant an increase in staff sickness costs.

       Enhanced pay, including overtime and bank premiums have cost in excess of £1.75 million, as we aim to cover staffing requirements utilising existing staff to ensure quality of care and as part of infection control.

       Despite Government efforts to increase the supply of PPE, earlier in the pandemic we were struggling to access adequate stocks and spent over £1 million on PPE, that was additional and unplanned.

 

Reduced income

       MHA’s care home occupancy has already reduced from around 91% pre-coronavirus to 81% – annual lost income of £20m to date.

       Housing sales contraction has impacted on our self-funding residents’ ability to pay fees .

       Decreased operational income for our MHA Communities service has led to £3 million of lost income.

       Fundraised income has reduced significantly for MHA, with circa £5 million of lost income for 2020-21. In particular, this is because we have been unable to undertake community-based fundraising activities.

While we appreciate the Government and local authorities have been supportive to the sector, particularly through the Infection Control Fund and its extension, the funding has not been enough to deal with our funding pressures. Of the 177 local authorities we deal with, only 25% have provided uplift in fees. This has ranged between 2.5% and 10%, averaging 7%.  This additional cost and loss of income could lead to fee increases across the sector and destabilise an already fragile market as care providers seek to cover costs and make care homes viable.

Furthermore, as the response to the pandemic develops the Infection Control Fund is being stretched further and expected to cover more costs, such as limiting staff movement between homes[9] and increased testing to allow visitors.  Latterly, the welcome Government’s drive to allow regular visits to care homes by friends and relatives, an increased testing regime has also been designed, although not fully-resourced. This will mean a significant increase in workload for care homes, virtually quadrupling the amount of testing being carried out, along with the associated  booking appointments, administering tests, uploading the testing information and results and supporting the visitor once in the home. 

With the Government indicating that even with the roll out of a vaccine, the pandemic will continue into April 2021, the sector is at breaking point. The government urgently needs to increase its financial support to local authorities and to the social care sector.

 

  1. Spending Review announcement is not enough: We welcome the announcement of increased core spending power for local authorities in the SR20. However, the associated announcement of £1 billion for social care, through £300 million of social care grant and the ability to levy a 3 per cent adult social care precept and the continuation of improved Better Care Fund funding, falls short of what is needed by the sector in order to deliver for people who need care. As welcome as the funding is, only £300 million appears to be genuinely new grant funding and is shared between children’s and adult social care. The social care precept provides limited means to raise additional funding and often does not raise enough money where it is needed. As the LGA says “it is not sustainable; it raises different amounts of money in different parts of the country, is unrelated to need and adds an extra financial burden on households.”[10]

 

What the impact is of another one-year spending review and a further delay to a multi-year settlement and the Fair Funding Review.

 

  1. We need a long-term plan:The current level of funding available for adult social care is simply not enough to meet the needs of an ageing population, and allow people to live life to the full.  Yearly injections of cash, whilst welcome, can at best only help to fix problems in the short-term and this year’s injection of funding will not evening doing this. Yearly funding also does not offer the opportunity to stabilise the current system. They do not allow services to plan for the future, improve the quality of care they provide.  To address the issue of under investment in the adult social care sector, a long-term plan is required urgently.  Due to the increasing strain on the sector, a further delay to the significant funding that would be provided by a multi-year settlement will only cause further de-stabilisation of the social care sector.

 

 

November 2020


[1] Comprehensive Spending Review 2020: LGA submission, September 2020

[2] Ibid.

[3] Adult social care Performance Tracker 2019, Institute for Government

[4] Social care 360, The King’s Fund, May 2020

[5] The State of Care, Care Quality Commission, October 2019

[6] 'Care deserts' mean older people aren’t getting the care they need, Age UK, May 2019

[7] Annual Budget Survey 2020, ADASS, June 2020

[8]COVID-19 and English council funding: how are budgets being hit in 2020–21?, Institute for Fiscal Studies, August 2020

 

 

[9] Stopping movement of staff between care settings, Department for Health and Social Care, November 2020

[10] Spending Review 2020: On-the-Day Briefing - Adult Social Care, November 2020