Care homes and domiciliary care companies across Wales are threatened with closure because of a looming funding crisis.
The planned introduction of the living wage in the social care sector will have “catastrophic” consequences unless more money is found to pay for the spiralling costs of care.
The Five Nations Care Forum, which represents the sector in the home nations and the Republic of Ireland, is so worried it has written to Chancellor George Osborne warning him it could push many care and nursing homes and domiciliary care companies over the financial edge.
According to the Five Nations, the social care workforce deserve to be better rewarded but nobody has worked out how it’s going to be paid for.
They say the fact that more and more people are living longer is putting huge pressure on the social care sector – to the point where it is becoming “unsustainable and financially unstable.”
People working in social care are due to start receiving the living wage, set at £7.20 an hour, from next April.
Mario Kreft MBE, chair of Care Forum Wales and a founder member of the Five Nations, was also concerned about the impact on the older and disabled people who use care services.
Mr Kreft said: “We call on Government and the devolved Ministers to ensure that care services are adequately funded now and in the future.
“It is right that care workers should be well rewarded for the important work they do. However this is unrealistic for publically funded care providers given current prices paid by commissioning bodies for care.
“It has been estimated that the cost of funding the National Living Wage in the care sector in the UK will be in excess of £2.3 billion by 2020.
“It is vital therefore the Chancellor addresses the growing deficit in the social care sector and that funding is provided to ensure the devolved departments with care commissioning responsibilities have adequate funds to meet the care and support needs of the population.
“We are concerned that the rising costs of delivering care, if they are not met with an adequate increase in funding, will have catastrophic implications for the sector as a whole and will have consequences for the statutory health sector in the form of delayed discharges and increasing demographic pressures.
“Diminished capacity in the social care sector and the increasing risk of provider failure – apart from having a serious negative effect on citizens – will impact greatly on the efficiency of the health sector.
“We estimate that over the financial year 2013/14 the statutory health sector in the UK spent well in excess of £1.05 billion on delayed discharges.
“If this situation is not resolved as a matter of urgency, we are concerned that the growing pressures on the health sector over the winter months will result in a serious crisis in the sector. This will impact most acutely on people with health and care needs.
“Unfortunately, the social care sector is already blighted by many years of chronic underfunding which causes a whole raft of problems, not least the fact that it suppresses pay levels for staff.
“The commissioning process should be about quality and securing value for money and not about paying the lowest possible price.
“It is therefore vitally important that the Chancellor addresses this looming crisis as a matter of urgency.”