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Social care progress not fast enough

Social care budgets drag on care-in-the-home providers Mitie and Mears, despite recent increases
December 3, 2015

The chief executive of major social care provider Mears (MER) has urged the government to expedite the integration of key health budgets so companies like his can better deliver their services.

David Miles told Investors Chronicle he advocated a more integrated approach between NHS trusts and local authorities in delivering care in the home as a way to improve the under-pressure system.

The comments come after the company secured a minimum five-year contract with Torbay and South Devon NHS Trust to provide its 'LivingWell@Home' service, which is delivered in partnership by the NHS trust, the council's commissioning team and Mears.

The chancellor, George Osborne, announced increases to the social care budget in his Autumn Statement last month, but changes to the funding of care in the home are not happening fast enough for companies providing the services. The chancellor said the integration of social care and healthcare budgets is not likely to happen until 2020.

In the near term, local authorities responsible for social care will be able to increase social care funding by raising council tax 2 per cent above the existing threshold thanks to moves by Mr Osborne. The government said this could raise £2bn by 2019-20 if all local authorities took it up. From 2017 social care funds for local government will also be made available via the Better Care Fund, rising to £1.5bn by the end of the current parliament.

Both Mears and its peer Mitie (MTO) said they had struggled to find high-quality care workers, as wages are depressed due to the shortfall in local government funding. During the first half of the year, operating margins for Mears' care division slumped to 4.6 per cent from 7.8 per cent in the previous year. Meanwhile Mitie was forced to shut some of its healthcare branches during the first half. Management stated at the time: "We will not jeopardise the quality of care by providing services at unsustainable rates."

The Local Government Association (LGA) said that, while the increases were welcome, they may not come soon enough. The body - which represents local authorities - also had concerns over funding disparities between councils.

Deputy chair of the LGA, Sharon Taylor, said in a statement: "Wealthier areas could benefit more because they collect more of their budgets through council tax and are less reliant on government funding. More deprived areas could then be hit doubly hard because they will have to cope with deep government funding cuts while being unable to use council-tax-raising powers without dragging low-income families into financial difficulty."