Most local authorities are outsourcing their statutory duties to care for vulnerable adults to private healthcare providers, and the question that comes to mind is, is this sustainable in light of escalating costs and reduced government funding?

It’s worrying when the current largest provider in the residential care market is saying that changes to the funding on offer are required. It seems clear that the national living wage will continue to increase, expected to rise by a further £1.80 per hour by 2020. If funding for care remains at the same level, it may be difficult to see where care providers are expected to find the money to pay their staff.

When Southern Cross Healthcare collapsed towards the end of 2011 there was talk about whether government intervention would be necessary to ensure the continuing care for their 37,000 residents. At that time the landlords who owned the premises either took the functions in-house or found other providers to operate the business for them. Five years later, with industry leaders saying that the current model is unsustainable, there is a risk that in the event of another large provider collapse, the industry may not be prepared to do this again.

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