Independent care providers have outlined the significant cost pressures they face in a report published by the Care Provider Alliance.

The ‘Provider Market Sustainability – Planning Support to Councils’ report was produced for councils ahead of the submission by providers of their Market Sustainability Plans to the Department of Health & Social Care on 14 October as part of the Cost of Care exercise.

In the report providers outline the key concerns they face in the areas of workforce, energy, inflation and return on operations/capital.

In staffing, vacancies rose 52% in the last 12 months with 60% of providers needing to uplift carer pay in addition to their annual pay uplift due to the cost-of-living crisis.

Almost nine in ten (88%) said they struggled to secure agency staff with 50% using agency workers to cover long-term vacancies.

One in four (26%) reported short-term vacancies with recruitment costs up 127% in the last two years and overseas recruitment costing providers between £3,000 and £5,000 per year.

In addition, providers said they faced a three- to fourfold rise in energy prices compared with 12 months ago even with the Energy Bill Relief Scheme.

Food inflation accounts for over 15% of care home providers total costs with insurance premiums 400% higher than pre-pandemic levels.

Providers said councils did not apply sufficient return on operations or capital levels to sustain a profit/ surplus to invest in their organisations and stay in business.

Professor Martin Green OBE, chief executive of Care England, said: “The Fair Cost of Care exercise was engaged with by around 32% of care homes, equating to 41% of care homes places in England. With such a significant representation of data, local authorities now have the evidence they require to secure the future sustainability of the sector. There is no room for further excuses. The Market Sustainability Plans must focus on the solutions required to address local issues around workforce pay and benefits, as well as address the provision of funding for providers.”

Councillor David Fothergill, chairman of the Local Government Association’s Community Wellbeing Board, said: “This report helpfully sets out the pressures that some care providers face, many of which the councils agree with and regularly highlight in their lobbying work.

“The LGA has called on the Prime Minister to deliver on her leadership campaign promise of £13 billion of additional funding for social care. This funding would be used to tackle the ongoing problems social care is facing and would go some way to improving pay for care workers and strengthening the social care workforce, as well as stabilising the provider market.

“There are many issues that need further exploration and we continue to work with providers to understand cost pressures, as do councils at a local level. The entire care sector should be working towards ensuring that adult social care is adequately and sustainably funded by the government.”