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Care Cap & Government Austerity





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Care Cap & Government Austerity

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Shifting demographics are and will continue to have significant repercussions on the long-term care market in the UK. Austerity and CQC regulations have also been impacting on the care industry, causing care providers try to provide excellent service at low cost. In addition, high rents for properties and the costs of a debt mountain – today care homes across the country are feeling the squeeze. As a result;

  • Southern Cross one of the leading care home groups shut down its business in 2011. The company had 750 care homes, 37,000+ beds and employed around 41,000 staff.
  • Four Seasons, which had more than 22,000 beds spread among 470 homes, were struggling under £500m of debt in 2015.

However, the market is still expanding rapidly, creating opportunities for care providers to grow their business by adapting to the changes.Here, we will be exploring existing opportunities that availble to win the care market.

Government Austerity

The adult social care system is suffering a funding crisis of significant proportions. The following issues reshaping upon the sustainability of adult social care provision and local markets are well-known:

  • Local authority budgets have been reduced by 40% since 2010.
  • More than £1 billion has been slashed from council’s social care budgets since 2010.
  • Since 2010, adult social care departments have had to make savings of 31% in their budgets – £4.6bn.
  • • The LGA estimates that the funding gap between March 2014 and the end of 2015/16 for adult social care alone stands at £1.9bn, rising to £4.3bn by 2019/20

However, in terms of searching sustainable solutions for social care, local authorities have been implementing cost reduction and innovation strategies in order to provide sufficient service for vulnerable adults.

The results of this Capita/CCN Survey show that the squeeze on local authority budgets has led to councils negotiating hard with providers to secure better value for money. But they are now reaching the limit to what they believe can be achieved while maintaining a sustainable and functioning social care market

Sources: CCN Research (County Care Markets: Market Sustainability & the Care Act)/Laing Buisson

What is Care Cap

In England the cost of care will be capped from 2020 (the government has delayed the original 2016 date). It will mean for the first time since the system was created after the Second World War, that there will be a limit on how much people pay for their care in their old age.

This covers the help people get in their own homes for tasks such as washing and dressing, to places in residential or nursing care homes.

How does the system work currently?

Social care is means-tested, which means only the poorest get state help towards their costs.

Currently anyone with assets of over £23,250 has to pay the full cost of their care. If you are being cared for in your own home, that figure only takes into account any savings, stocks or shares you have.

If you are moving into a care home the value of your home may be taken into account, depending on your circumstances.

The costs people face, therefore, can run into thousands of pounds. One in 10 who enter the care system end up paying over £100,000 in fees.

Care Act 2015 – Self Funding

If a service user has £23,250 or over in capital, savings, or assets, a service user will be expected to pay the full cost of his/him care and support services. Under certain circumstances, self-funders may be able to get help from the NHS towards paying for their nursing home fees through continuing healthcare, or a contribution towards the nursing costs in care a home.

Furthermore, there are significant demands for self-funding for those who are willing to pay extra money in order to obtain excellent services. Based on Care Quality Commission (CQC) and Laing and Buisson data. These indicate that self-funders accounted for 169,748 of care places, i.e. 39.6% of nursing home residents and 47.6% of care home.

Sources:http://www.bbc.co.uk/news/health-30922484(How the cap on care costs works)

If self-funding has been the solution to fill the vacuum of government cuts, the competition between care companies will likely to be increased in coming years. They will have to implement excessive marketing campaigns to increase their brand equity in terms of attracting more customers.

We will be launching an exclusive white paper very soon to explore the following management strategies in depth.

  • How to avoid strategic drift in the care market.
  • How to identify your KPI’s (Key performing indicators) to achieve your business goals.
  • How does specialisation help healthcare companies to achieve economies of scale.
  • How to how to reduce the employee turnover.
  • How to measure your ROI effectively.

How Care Consort can help Care Providers to improve their business.

Increase efficiency

Focusing on the care environment as a whole, Care Consort supports all your operational processes. By effectively supporting you to manage core elements of your service, you can be confident that consistent care quality is delivered, stronger management at all levels is achieved, and complete care transparency is provided.

Increase efficiency

Providing real value for your staff with flexible, instant access to mandatory training in the health and social care sector and creating individual staff training matrix for easy management.

Streamline business

Streamline your business operations with complete transparency. Efficiency is optimised by assigning the right staff at a given location, to specific tasks. Managers have real time visibility of care plan task execution locally, regionally or nationally from any device.


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