Thanks to the coronavirus pandemic, global supply chain issues, and Brexit, to name but a few, many UK industries are struggling, with retail, hospitality, tourism, and construction being some of the worst-affected sectors.
However, another industry that is suffering exponentially is the UK care sector – and it should be of high concern to everyone. Whilst we might not all have a direct need for home care, we either know someone who does or may do in the not-so-distant future.
To put it simply, the care industry is up against it. It's even been said that the industry is on the brink of collapse. So, what are the main issues facing the care industry at the moment? We investigate below…
6 factors pushing the UK care sector to the brink of collapse:
COVID-19
The pandemic has had a devastating effect on both people being cared for and those working in care homes.
The 1.5 million people working to look after people in care homes have been facing challenges such as high vacancy and turnover rates and low pay – not to mention they are putting their lives on the line every day due to the very nature of their work.
In addition, the pandemic has also had a significant impact on the mental wellbeing of the industry too, with four out of five workers reporting feeling tense, uneasy and worried.
What’s more, care homes are facing a credit crunch too, with banks refusing to lend money or provide new services for fear that the sector is about to crumble.
Care providers are also reluctant to reveal problems and ask local authorities for help due to the fear of being put into special measures or losing contracts.
So, despite the government unveiling a £300 million fund to help recruit and reward the workforce, it’s possibly too little too late.
Brexit
It’s no secret that the UK care sector relies on immigrant labour and has done so for a very long time.
Qualified, caring, and conscientious foreign workers are the backbone of care in the UK – and due to tougher immigration rules, the gap in the market has yet to be filled by UK workers prepared for the double whammy of long hours and low wages.
Budget cuts
Council and local authority budgets are being cut all the time – and these budget cuts have a huge effect on private care companies, many of which are too small to soak up losses.
To put things into context, care companies can expect to receive £17.48 per hour from local authorities, with the money being split between paying staff, mileage, recruitment, HR, national insurance, pension contribution, sick pay, holiday pay, uniforms, equipment, scheduling, supervisions, and all other associated business costs.
When you put it like that, it’s no big surprise that profits are suffering.
Minimum wage
With budgets so tight, then, it’s no wonder that care companies can’t afford to splash the cash on employee wages.
Carers’ earnings are notoriously poor, but contrary to popular belief, this isn’t due to greedy senior management – rather, the pay is low simply because the profits are so tight, and any increase in pay has a direct effect on the profitability and viability of the company.
Shortage of trained nurses
There is a woeful lack of qualified nurses in this country.
Be it in the NHS or privately, figures from the Office for National Statistics showed that of the 1.2 million advertised job vacancies in the UK in the three months leading up to November 2021, 200,000 were in the health and social work sectors alone.
But why are care homes struggling to recruit and retain staff? Most likely due to care workers feeling less valued than ever before.
Growing demand
Along with all this, of course, is the continuing increase in average life expectancy.
This, combined with various improvements in healthcare provisions, has led to an ongoing increase in the number of elderly people in need of home care – and with so much going on, it’s no wonder the industry can’t keep up with the spike.
In conclusion...
The threat to the care industry is very real indeed, and much needs to be done to ease the pressure that the UK care sector is currently under.
Those that receive care deserve better, those that work as carers deserve better, and the people who try their best to run care homes against the odds deserve better too.
Only time will tell what will happen next, but hopefully, as the world recovers from the pandemic, the care industry will find the funding and reforms needed to allow it to flourish.
How McAlister & Co can help
If you run a care business that is currently struggling and possibly facing insolvency, why not contact us today to see how we can help?
At McAlister & Co, we are business rescue experts and can provide a variety of specialist solutions from company voluntary arrangements and pre-pack administrations to creditors’ voluntary liquidations.
Contact our friendly team today and start taking back control.
