Nursing homes face a credit crunch as banks refuse to lend money or offer new services for fear the care sector may collapse, senior carers warn.
A survey of care providers in Hampshire found that 20% of their bank were concerned about their long-term profitability. Several reported that their bank said they had “no appetite for the care industry” and denied them basic services such as additional accounts.
Nadra Ahmed, chair of the National Care Association, said providers are under similar pressure elsewhere. âWe haven’t seen any polls, but I know these discussions are being held across the country with all banks. Some a little more aggressive than others. In any case, we hear that providers are starting to feel the pressure. “
For fear of special measures or the loss of care contracts, caregivers are reluctant to report their problems to their municipal clients or the Care Quality Commission. Almost half of the nursing homes that responded to the Hampshire Care Association (HCA) survey said they were concerned that the current crisis could place them in a risky position with their bank or lender.
A fifth said their bank or lender contacted them to raise these concerns directly. While some banks have been supportive, others have put pressure on them, including sending “threatening letters,” one provider said, expressing concerns about providers’ long-term viability.
The report cited vendors who said banks did not want to partner with adult welfare organizations. “[We were] said the bank has no appetite for the care industry, “said one provider. “[They raised] Concerns about the longevity of nursing homes as a viable business, âsaid another.
Andrea Pattison, HCA board member who led the survey, said, âThis is not just an issue for one or two banks or one or two vendors. The majority of the sector is made up of small and medium-sized enterprises, and government must intervene to prevent banks from closing viable businesses, imposing unfavorable conditions, or withdrawing funding.
âFailure to do so would pose a threat to the adult social care sector as a whole and, more broadly, to the NHS, which relies on us to provide excellent care.
âIt was a shock to hear vendors say their banks are not interested in the welfare sector. That was very worrying. “
Ahmed said the welfare crisis is becoming more acute. “Any resilience of providers to Covid has been undermined due to the PSA fiasco and everything we went through before funding was provided,” she said.
On September 30th, the Infection Control Fund, a Â£ 600 million pot to pay for PSA for social enterprises, will end. “We do not yet know whether this will continue,” said the industry association Care England.
The gas price crisis and labor shortage also put social welfare under pressure, Ahmed said. âIn a care facility, the heating doesn’t go out,â she says. âThis is a time of reckoning. The Minister of Health urgently needs to work to create a sustainable social care market and bridge the gap between resources and demand – not just money, but the workforce too. They are exhausted and anxious and are offered better-paying jobs than Amazon delivery drivers. “
The survey comes after months of industry concern that, due to insufficient financial aid during the Covid pandemic, nursing homes and home care providers will cease operations and vulnerable people will be left without care.
An analysis by the Liberal Democrats shows that social welfare is facing a Â£ 1.7 billion Covid black hole. Local authorities in England spent Â£ 3.2 billion on adult welfare in the first year of the pandemic, with money being used on PPE, additional labor and meeting additional demand. Still, they received only $ 1.49 billion from Westminster.
“More than 1.5 million people are now missing the care they need, and many are stranded in hospital and unable to walk because aftercare just isn’t there,” said Lib Dem health spokeswoman Munira Wilson MP.
UK Finance, which represents the banking industry, said the survey did not reflect the conversations with people in the industry. A spokesperson said: âLenders understand the current pressures on the social care sector and are actively supporting profitable businesses. As responsible lenders, financial service providers will be in regular contact with their customers to review their status and determine if assistance may be required. “
The government said it would encourage banks and lenders to be flexible with their customers. Local authorities would have access to sustainable funding for core budgets when reviewing spending.
A government spokesman said, “We are committed to providing world-class welfare and the new $ 5.4 billion.