Late payment of invoices by the NHS and local authorities along with a reduction in available hours threaten the viability of home care providers, a report has revealed.

The survey of over 23,280 care workers supporting nearly 42,995 older and disabled people found four in five (80%) home care providers have experienced late contract payments and almost half (47%) had all invoices paid late.

Homecare Association chief executive, Dr Jane Townson, said: “Late payment of invoices by the NHS and local authorities is a serious issue, threatening the financial viability of many home care providers. Some are having to spend months fighting for thousands of pounds owed for care delivered, being pushed from pillar to post without resolution.

‘’Local authority commissioners need to appreciate the importance of the volume of hours available per provider, as the reduction of hours delivered severely impacts on financial sustainability of services.”

Almost a quarter (23%) of respondents said average payments from the NHS took longer than the Prompt Payment Code guidance of 90 days, with 21% of local authority payments missing the benchmark.

The Homecare Association said small providers owed as much as £350,000 have been waiting over a year for payments, with larger providers reporting local authority debts of over £1 million.

Nearly half (48%) reported a 25% reduction or above in the number of hours available to them from their local authority.

The report calls for:

• Local authority commissioners to appreciate the importance of volume of hours available per provider in ensuring staff retention and financial sustainability of services
• Local authority and NHS commissioners to abide by the Prompt Payment Code
• Local authority and NHS commissioners to offer greater security of hours and income to trusted providers
• Central government to provide adequate funding for local authorities to enable them to move towards approaches to commissioning and purchase of homecare which encourage quality and sustainability of services.

An LGA spokesperson said: “Across the country, councils continue to work closely with adult social care providers in the private and not-for-profit sector and are acutely aware of the financial pressures they are under. Councils do all they can to avoid exacerbating those pressures.

“Processing payments at the scale that councils do means there are inevitably complexities which can sometimes cause delays, such as when required information in an invoice is not given.

“A majority of payments made by local authorities are correct and on time, councils have absolutely no deliberate intention to pay late.”

Sheila Norris, joint chief executive of the Association of Directors of Adult Social Services, said: “This report highlights the complex financial environment that both councils and providers are operating within. The absence of a long-term sustainable funding plan for adult social care has hampered their ability to plan over the long-term, improve quality of care and deliver the care we want and need. The impact is clear, with 66% of directors reporting providers closing or handing back contracts last year.”

A Department of Health and Social Care spokesperson said: “We are hugely grateful for the work home care providers do.

“Local authorities are responsible for ensuring payments to home care providers are timely and that they commission an appropriate number of hours of care in order to meet the needs of the population.

“We have made available up to £7.5 billion in additional funding over two years to support adult social care which has enabled local authorities to increase their adult social care budgets by 10% in real terms this year.”