Protecting the future of the Learning Disability sector
Overview from Neil Blanchard, our Chief Executive, and Sharon Clare, our Director of Operations for Care and Support on Southdown's lobbying to secure fair and appropriate funding to continue to provide quality and safe services.
Southdown has a long history of providing quality care and support services to people with learning disabilities living in Sussex. We are passionate about upholding the rights and choices of our clients, many of who are very vulnerable with complex additional support needs.
Despite being a robust, efficient and well-managed organisation, Southdown is facing increasing challenges to the ongoing sustainability of its learning disability services. This has led to this area of our operations moving into a deficit financial position over the past two years, and without changes to the funding of services, we have serious concerns about the future viability of not only our own services, but also the wider sector.
Although we await the delayed Government Green Paper of Social Care that looks to address long-term issues for the care and support system, as any proposals are unlikely to have an impact for some years, we feel there is a need to take action now and further increase awareness of the issues facing the learning disability provider market.
As part of this initiative, we have identified our top current challenges:
1. Hourly fee levels not keeping in line with increased costs
Cumulative price changes 2013-2018 have been 11.31% (Source: https://www.ons.gov.uk/economy/inflationandpriceindices). In addition to this general level of cost inflation, care sector employers have also faced a range of other mandatory cost rises related to employer costs: National Living Wage (14% cumulative rise since introduction in 2016), Apprenticeship Levy (0.5% of salary budgets which for Southdown is £73k p.a.) and stepped increases in Pension Auto-enrolment levels (now 3% for employers and 5% for staff, due to increase another 1% in April 2019).
Against these significantly increased in costs, hourly rates received from some Local Authorities were cut by 7-8% in 2012 -14, and since then have risen less than inflation. For example, despite the rises in costs fee uplifts have only risen 5-10% and remain significantly below pre-2014 rates. This has led Southdown’s learning disability division to move into a deficit trading positon in 2017/18, which continues in 2018/19 and is set to continue next year and beyond. In our Five Year Financial Plan, we have identified the minimum level of fee increases that will be required year-on-year if we are to remain financially viable and continue to be able to deliver these under-funded services.
Discussions with other local CEOs, and reviewing published financial statements of providers, indicate deficit-trading positions for care services as a sector wide trend. Our commissioners hold a duty to have market oversight to ensure the ongoing viability of services for vulnerable people. Although we appreciate the financial pressures that they themselves face, care providers need to receive adequate funding to continue to provide safe, secure and caring services. Without additional funding the sector will also not be able to respond to the Local Authorities requirements for new developments or enable any innovation in the sector.
2. Recruitment and retention
The social care sector is experiencing a staffing crisis, with over 110,000 national vacancies on any one day during 2018 (Source: https://www.skillsforcare.org.uk/Recruitment-retention/Recruitment-and-r...). The Kings Fund says the sector will need to attract 700,000 more staff in the next 12 years. Locally in Sussex, with effectively full employment and very high living costs, the situation is now acute and predicted to deteriorate further over coming years. Social care already has a high staff turnover and relies heavily on people from around the world: numbers from the EU are falling, due to the falling pound and an impression that Britain is a hostile environment. Over 20% of care workers are migrants. Care staff earn an average £8.60 an hour according to Stephen Clarke, the Resolution Foundation’s labour market analyst. That means the person caring for our vulnerable and disabled people is paid less than caretakers, security guards, child minders and forklift drivers. They rank only marginally above street cleaners in Clarke’s earnings charts. He estimates it would need an uplift of at least 20% in their pay to fill all the posts emptied out by the current and pending migration policy.
Average turnover for all care providers across Sussex ranges between 26 - 31% (Source: https://www.ons.gov.uk/economy/inflationandpriceindices). Southdown’s rates are currently 19%, and although this is better than the sector average, this has increased over recent years as we struggle to recruit and retain care staff. For every care job advertised we now only receive an average of 1.84 applicants despite people needing no previous experience (we provide a full in-role induction and training programme), with more than half of those offered interviews not turning up.
Seventeen percent of all jobs advertised across Sussex are for care workers (Source: Southdown review of all vacancies September 2018 on Indeed Jobs). With low pay rates for such roles (starting Southdown salary of £16,587 which equates to the average at £8.62 per hour), in addition to competition from other care employers (including local authorities themselves who pay higher rates for the same roles), we also face fierce competition from other types of businesses who are now forced to offer higher hourly rates and terms and conditions. Skills for Care say that better pay and fewer work pressures are the two main reasons behind workers’ decision to look for work in other sectors.
Unfortunately, despite making efficiency savings in many non-staffing areas, with funding not covering costs we have not been able to provide staff with annual cost of living salary increases. In real terms staff salaries are now 30% less than in 2008 (Source: https://www.ons.gov.uk/economy/inflationandpriceindices). Clearly, this exacerbates recruitment issues, as our salaries do not keep track with other sectors. Southdown are not alone in facing this situation.
Clients and their families tell us that the main feature of quality support they value is staff consistency. Southdown has a reputation for being a good employer, and we have implemented a comprehensive staff engagement and recruitment strategy over recent years. Despite all our best efforts, we have not been yet able to improve staff recruitment and retention levels, which places pressure on existing staff to cover shifts, as well as increasing agency costs. The high level of movement within the current care workforce has an impact on costs, service delivery and continuity of care.
The key factor preventing us improving the competitiveness of our salaries to attract staff to work for us is the inadequate funding that we receive.
3. Valuing the social care workforce
Care work is a skilled and demanding job, involving unsociable hours and increasingly requiring staff to support clients with very complex physical and behavioural needs. It is vital that we can attract and retain staff with the right skills, values and behaviours, to raise and deliver quality standards for people using social care services. As a society, we need to recognise the importance of care roles and remunerate them accordingly.
Since the introduction of the National Living Wage, a higher proportion (over 30%) of care workers are paid at the minimum rate compared to less than 10% paid at the minimum rate in 2016. The majority of care workers are women (82%) and the issue of their gender pay parity has been the subject of various legal cases and been accepted by Local Authorities as an area that has needed to be tackled.
The vast majority of local authorities are now paying the Real Living Wage (currently above £9 per hour) to their own lowest paid staff, with significantly higher increases being paid to their low paid staff, including care workers, in the NJC pay agreements for 2018-2020. Some local authorities even promote their registration as a Real Living Wage employer, despite their overt basing of contractor fees on the 15% lower National Living Wage rate – this is not in keeping with the RLW standards. Staff employed by contractors are increasingly being left behind, including many care workers, most of whom are women.
Many are struggling on poverty pay despite the overwhelming pressures they are facing. It is time local authorities committed the funding so all care staff get a wage they can survive on.
A challenge for Southdown is to attract people into the role when competing against Local Authorities offering higher hourly rates. In addition, our being able to offer higher pay rates to reward the workers with more experience or greater responsibilities is becoming unaffordable.
Valuing the workforce also involves providing staff with management support, supervision and training. Without these elements the quality standards delivered to the people we support are put at risk. Fee levels need to reflect the total cost to providers of running good quality services.
The ongoing strategy by Local Authorities to review and reduce clients’ hours of support, whilst reducing the quality of life of the people we support, also has an impact on the experience of staff in the services. Staffing levels in many services are now funded at the minimum levels required for a safe service, this makes the day-to-day working experience of staff harder and places increased pressure on staff to cover for colleagues’ sickness absence or staffing vacancies.
The key factor preventing us improving our salaries is the inadequate funding that we receive.
4. High property void rates
Southdown, alongside all other providers, are experiencing increasing delays in care managers making appropriate referrals and agreeing funding packages to fill vacancies. Our own void rate in learning disability services has increased from 3% to 4%, and although better than the average sector rate of 8%, this resulted in potential lost income of £378k over just the first six-months of this year (April – October).
With financial pressures so acute across the board, we believe that commissioners need to take a more strategic approach, working in partnership with providers to make best use of available assets and resources. This would include improved tracking and coordination of vacancies across each local area, and new target timescales for agreeing funding packages and transfers. The Care Management teams need to be sufficiently resourced to manage this work.
Recommended commissioning principles to protect the future of the learning disability sector
As a not-for-profit provider, and operating at very tight margins, although we have been able to weather temporary deficits in the finances of our learning disability division over the past two years, this is not sustainable. We cannot fundraise for these services and cannot use funds received to run other services commissioned by the public sector. We are now in a position where we require commissioners to pay a fair and appropriate funding for us to be able to continue to provide quality and safe services.
To ensure we communicate our message clearly, we will be working in collaboration with other interested not for profit providers and local sector representative groups to lobby for commissioners to adopt the following principles:
- Increased collaborative strategic working with the provider sector to better manage assets and resources and understand pressures on the sustainability of their business models
- Commitment to provide sufficient hours of funding to maintain good, safe and operationally deliverable services
- When calculating hourly staff costs commissioners use as a minimum the Real Living Wage as a reasonable remuneration for the level of skill required (this is currently £9 per hour). Alternatively, the average hourly rate that Local Authorities pay their own care staff should be included in the calculation for the hourly fee rates for care services.
- Hourly rates to be calculated to reflect the total cost to providers of running good quality services. This includes management time, supervision, training and specialist support services (e.g. Positive Behaviour Support)
- Commissioners agree differential hourly rates for more complex clients/services (this was a recommendation at the October 18 Regional Transforming Care Partnership event)
- Annual fee increases take into account all elements of cost inflation for providers - calculated that this should be a minimum of 3.9% from April 2019 just to meet NLW and pension increases. However, this minimum increase falls significantly short of the increase required to address the deficit budgets that providers are facing. A fee uplift of at least 9% in 2019 is required to address the budget deficits and enable remuneration to care staff to be improved.
- Local Authorities do not register as a ‘Real Living Wage’ employer if they are basing contractor fees for care services on a lower hourly rate.
- New contracting arrangements and risk sharing agreements introduced on issues such as voids and core support costs to enable providers to continue to respond to the needs of local authorities and invest in new developments and service innovation.