A BBC Panorama investigation, screened earlier this week, found that a funding squeeze has seen care firms cancel contracts with 95 councils.

Commenting on the programme’s findings, Mark Beaver, social care operations manager at Reading-based agency Charles Hunter Associates, told Recruiter when speaking to care company owners across the UK, he is increasingly aware of organisations preferring to seek private referrals over local authority business.

“From a business point of view, it’s a wise move to do so because the referral fees are higher. However, this is counteracted by the volume of referrals decreasing – so moving away from local authority [work] where revenue is guaranteed is a risk.

“I do agree that the government’s recent budget is not giving these organisations much of a choice, and I see companies closing frequently because they rely on these government contracts and the decreases mean these fees barely cover costs.”

Beaver adds the knock-on effect of these cost constraints on clients has meant his agency has had to be more creative and flexible with terms of business.

“We are always faced with companies whose cashflow is not as abundant as other sectors, and I have certainly noticed the need for us an agency to be creative with agreements and terms of business.

“However, the constant need for qualified and experienced staff in social care is a positive sign that financial strain doesn’t prevent companies from continuing to provide care for vulnerable children and adults.”

Also commenting on the programme, Peter Cullimore, chairman at Bucks and Berks agency Universal Care, told Recruiter the programme reflected the tremendous work that care providers carry out, emphasising they don’t only do it when the sun is shining but they do it when the weather is inclement – at unsociable times of the day, and through weekends and bank holidays.

“But what it did emphasise was it always comes down to a concern for money,” he added. Cullimore says his agency is reviewing whether it can continue to serve this part of the sector.

“We have a very small amount of social services work and I was only talking about it this morning that we are going to have make decisions as to whether we can continue that social work … we are very nearly making a loss on doing it.”

But it appears in Scotland, local authority care providers are not suffering in the same way in terms of funding as those in England.

Shan Saba, director at Brightwork, told Recruiter his agency supplies Scottish councils directly through a framework agreement, where local authority care homes are paying the real living wage.

“We have a number of local authority clients across Scotland, which is really good for us because we’re on the framework for the Scottish government so we have access to all of the Scottish local authority care homes.”

But Scottish private care homes are not immune to increases in National Minimum Wage, Saba added. “With regards to private care homes, we find it is a very different model and that business is very, very margin led.

“We tend to find that care home owners have to look at the bottom line, whereas care home managers are looking at quality of care and we find we get caught in the middle of that.”

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