How the cost of living crisis impacts the care sector

How the cost of living crisis impacts the care sector

The cost of living crisis has touched every aspect of our lives, and social care settings are dealing with the acute side effects of it on a daily basis. Providers face a vicious circle of reduced budgets from private paying families and local authorities, declining health outcomes among vulnerable people and the rising costs of employees’ wages and maintaining property and equipment.

In Navigating Turbulent Times – Markel’s recent research into the care sector, just over a third of respondents said the biggest impact on social care due to the rising cost of living is on the health of service users. “There’s been a huge effect both on those who use care services and the providers who offer them,” explains Dr Andrew Jolly, assistant professor in the department of social work and social care at the University of Birmingham. “If people can’t maintain a healthy and balanced diet, they’re more likely to need social care intervention, and if they can’t afford to heat their homes this can be associated with respiratory problems and even increased risk of heart attacks. There’s lots of evidence that the cost of living crisis has both increased demand for care, but has also meant people are less able to afford it.”

This was a hot topic in an accompanying podcast to Markel’s research, featuring a panel of leading care professionals. Claire Rintoul, CEO of non-profit provider Sheffcare, who provide residential and dementia care homes, described a shortfall of £247 per person, per week for those funded by the local authority. “We need money just to stand still – we have to refurbish the building, we have to decorate, things break down. A bath can cost thousands of pounds and we have nine homes,” she explains. Almost one in eight respondents to Markel’s survey shared these concerns, citing a reduction in disposable income from private payers affecting their budgets.

Future burdens and what might help

A number of factors this year could further increase the burden for providers. In April, the national minimum wage will rise by almost 10% to £11.44, while electricity and gas prices continue to increase, with 46% of survey respondents saying they would welcome an energy price cap for the sector. Care businesses are, unsurprisingly, keen to find practical ways to ease the pressure on budgets and protect themselves against these challenges. Technology can improve efficiency in some respects. Using tools such as Teams or Zoom to host virtual meetings can reduce the time and cost of travel for domiciliary care workers, for example, while artificial intelligence can increasingly perform routine administration tasks such as booking interviews or sending out invoices. In Markel’s survey, 49% of respondents said more use of technology to cut down travelling times could be a viable solution to keep budgets on track.

They may seem futuristic, but we could see more and more ‘smart’ tools in care settings, such as incontinence pads that alert care workers when someone is wet or soiled, or Alexa-style devices that enable service users to communicate their needs more easily and quickly with staff. “There’s a long tradition of telecare in the sector, such as people using red pendants in their homes to alert a carer if there’s a problem,” Jolly adds. “While we may not see tools such as smart speakers as a core part of care provision, anything that keeps someone independent for longer can help, such as being able to restock food. Small incremental things like this could have a big impact on the sector.”

"Even for those who are not in care, the cost of living has a wider impact. It’s a resource issue that we must respond to"

Unpaid carers

Unpaid carers looking after a family member or friend are certainly not immune to cost of living issues. Research from charity Carers UK revealed that unpaid carers are often hit the hardest, with 75% of them struggling with the cost of living, with the government’s Carer’s allowance of £76.75 a week not stretching as far as they would like. Almost a third of those receiving this allowance, which goes to individuals caring more than 35 hours a week, said they were struggling with the cost of food, and almost half were cutting back on essentials. These carers are often “stuck between a rock and a hard place”, says Emily Holzhausen, director of policy and public affairs at the charity. “They are hit by the additional costs of caring which are not met by existing benefits and a reduced capacity to increase income. 40% of respondents to our survey told us that they had given up work to provide unpaid care and we have seen a worrying increase in the proportion of carers who are struggling to make ends meet.”

With an ageing population that is living longer, people are likely to live with social care needs for greater lengths of time. This means care providers, with support from policymakers, will need to continue thinking creatively about how they sustain this financially, concludes Dr Jolly. “Even for those who are not in care, the cost of living has a wider impact. It’s a resource issue that we must respond to.”

More information

Read Markel’s deep dive into the pain points of the care sector.

The Care Sector: navigating turbulent times
Icons/Arrow right

Published on
January 26, 2024