The decline and fall of Allied Healthcare has not been the disaster that some feared. Councils moved quickly to transfer services and, at time of writing, there have been few reported problems in finding new providers. Some have gone to a reborn Allied (under new ownership), some to other providers and some may be taken in house.
Optimists will see that as triumph of the market's ability to swallow weak companies and emerge stronger. But they would be wrong: as we argue in our recent report, the publicly-funded homecare market is fragile and its future uncertain. The rescue of Allied is little more than a rearrangement of deckchairs on a ship sailing further into trouble.
The iceberg straight ahead is workforce. Our report found recruitment was a huge challenge, particularly in less deprived areas with ample alternative employment. Companies cannot recruit enough staff and those that do join are too likely to leave. Little wonder when a job in Aldi pays a pound an hour more than the average rate for a careworker. Last year, only 20,000 new careworkers joined the social care sector – a fraction of the 950,000 new workers who may be needed by 2035. The transfer of Allied's business has not resolved this problem, merely redistributed it.
Providers say they pay such low wages because they cannot pay more on the rates they receive from local authorities. And though these rates are improving – the average rate paid rose 7.3% in 2016/17 and 3.4% last year – they are still well below what most observers believe is needed for sustainable, quality services.
In turn, local authorities say they are paying low rates because of cuts to their own budgets. But they can only get away with that because home care providers accept business that appears uneconomic. That is perhaps to fill out the hours they get from higher paying, private customers and also because some start-up companies (of which there are around 500 every three months) may simply not understand the full cost of running a service (a sobering thought if Allied business transfers to new providers). Others may be exploiting the complexity of home care delivery to pay staff effectively below the statutory minimum wage.
So the longer-term solution to home care's problems requires not just more money but better, outcomes-based approaches to commissioning. At first sight, neither sounds promising – more money will need to be part of wider social care reform while movement away from basic ‘time and task' commissioning is widely discussed but rarely delivered. The development of joined-up commissioning with the NHS as part of integrated care systems has the potential to change that. If commissioning can start to expect (and is prepared to pay for) the wider health benefits of home care – for example, aiming to reduce UTIs by ensuring service users are drinking enough water – then the full value of the 249 million hours of home care delivered in the England each year might begin to be realised. That won't be straightforward but it is a prize worth having.
Simon Bottery is senior fellow social care at the King's Fund
