A third of adult social care providers have considering existing the market due to financial pressures over the past 12 months, new research has revealed.

The findings were published in the Sector Pulse Check report, a piece of independent research commissioned by national learning disability charity Hft and Care England, which was launched at the Care England conference in London today.

The report describes how cost pressures, including sky-high utility bills – rising by as much as 500% for some providers – and increasing, unfunded workforce pay resulted in 82% of providers being in deficit or facing a decrease in their surplus in 2022.  

Financial and workforce pressures saw 42% of providers forced to close parts of their organisation or hand back care contracts to local authorities.

One survey respondent described the current climate as “genuinely the most perilous period in the organisation’s 50-year history”, going onto say that their “ability to provide residential care and supported living is seriously compromised”.

The Sector Pulse Check report illustrates that workforce-related cost pressures, driven by increases in the National Living Wage, were a standout concern for providers, with 92% citing workforce pay as a key pressure on their organisation. Concerningly, 81% said local authority fee increases did not cover the increasing costs of workforce pay in 2022.

Low wages relative to other sectors, as well as a perception that better opportunities exist elsewhere, were identified as key drivers of difficulties in recruitment and retention, with 95% of respondents saying that increasing pay would have the most impact on boosting staff numbers.  

Kirsty Matthews, chief executive of Hft, said: “We can no longer afford to ignore the fact that our sector is being driven out of the market without acknowledging the devastating impact this is having on the lives of the people who draw on our support, the National Health Service and the wider economy.  

“We hope our research illustrates key issues that government could work to address in the short term to provide a longer-term solution to ensure the sustainability of this very important part of society.”   

The report calls on the government to establish a minimum care wage, align benefits, terms and conditions with NHS staff and provide a professional register for care workers in England.

In addition, it recommends the government continues to offer enhanced support for energy costs equivalent to that offered through the initial Energy Bill Relief Scheme expiring on 31 March 2023, and remove the 5% VAT surcharge currently applied to energy bills until energy prices stabilise closer to 2021 levels.