Government support for UK care homes during the pandemic was withdrawn too soon, according to a new study into the financial impact of Covid-19.
The report, entitled Bailed Out and Burned Out? and headed by Warwick Business School, also said the system had been propped up by staff working extra hours without pay.
The results of the research, which studied the accounts of more than 4,000 care home companies from just before the pandemic, have been published as the Government is discussing reforms to adult social care.
While £2.1 billion of public money helped prevent widespread financial collapse, most payments ended in 2022 and the report said not all of the money reached the front lines.
While 60% of homes were financially struggling at the start of the pandemic, 122 larger companies were able to pay shareholders increased dividends in the first year of the crisis.
The report concluded: “Despite clear warnings that the financial impact of a pandemic… would prevent care home services from functioning effectively, there is no evidence that government had any contingency plans in place to address this challenge.
“The decision by government to end financial support for care home companies after the peak of the pandemic had passed has likely contributed to the current financial and operational difficulties experienced by the sector.”
The report continued: “The financial viability of the care home sector was partly dependent on care workers working harder and longer”.
But it said there was “no general increase in hourly pay” and that some staff experienced reduced benefits for working more hours.
The report said: “Very little of the additional financial support for the care home sector from government was dedicated to supporting staff and improving their health and well being, despite the immense pressure they were under both at work and in their personal lives.”
The report found it was “not surprising” care homes had struggled to retain and recruit staff once lockdown restrictions were eased.
In the first year of the pandemic, the report found 60% of care home beds for older people were operated by companies which would be put at risk of insolvency by a mild economic shock.
During the pandemic, it also said:
– 80% of workers questioned said they worked more hours.
– 42% reported financial problems related to working in care homes.
– Half of those questioned said their ability to meet residents’ needs worsened.
– Staff vacancy rates in residential care homes in January 2022 reached 11% – up from 6% in April 2021.
Meanwhile, funding promised for the social care workforce in England has been halved.
In its People at the Heart of Care white paper on adult social care reform, published in December 2021, the Government pledged to invest “at least £500 million over the next three years”.
But the Department of Health and Social Care has now said its “call for evidence in partnership with Skills for Care on a new care workforce pathway and funding for hundreds of thousands of training places, including a new Care Certificate qualification”, would be backed by £250 million.