An NHS chief warned “lots” of private care homes could fail before the sector burned through two thirds of the coronavirus support package for councils in just three weeks, The Telegraph can disclose.
Such is the scale of financial turmoil facing smaller homes dealing with Covid-19 that an initial £1.6billion support package to cover demand across council services was immediately branded insufficient.
On Saturday, the Government doubled that contribution, handing over another £1.6billion to the wider effort by local authorities.
However, ministers will continue to face mounting questions over a financial black hole facing the care sector.
Analysis by the County Councils Network shows small private homes previously accounted for well in excess of a billion pounds of the previous support package.
Minutes from an NHS Digital board meeting also show executives “queried whether there was more to do in supporting Social Care, recognising that a lot of smaller private Social Care providers could fail”.
Sarah Wilkinson, chief executive of NHS Digital, told the meeting that James Palmer, a social care chief, was trying to ensure that her agency “has better visibility” of the crisis.
A source close to NHS Digital, which is responsible for technology and data projects within the health service, claimed discussions during the meeting related only to the digital systems in care sectors.
The meeting took place on March 18, seven days after Martin Green, the chief executive of Care England, called for urgent action to avoid a shortage of beds for the 410,000 residents in care.
Research by the accountancy firm BDO also detailed how UK care home firms were buckling under the pressure of funding cuts, crippling debt and rising costs.
Doubling the total payments to councils to £3.2billion, Robert Jenrick, the local government secretary, said that local authority workers were the “unsung heroes” of the coronavirus response.
He claimed the new support package was proof of his promise to local services that they would get “the resources they need to meet this challenge”.
“We stand shoulder to shoulder with local government and my priority is to make sure they are supported so they can continue to support their communities through this challenging time,” he added.
“Up and down the country council workers are the unsung heroes as we tackle this virus. They are in the front line of the national effort to keep the public safe and deliver the services people need. Never has this been more important and we are all rightly grateful for everything that they are doing.
“This new funding will support them through immediate pressures they are facing to respond to coronavirus and protect vital services.”
The fresh funding is intended to help councils “getting rough sleepers off the street, supporting new shielding programmes for clinically extremely vulnerable people and assistance for our heroic public health workforce and fire and rescue services”.
The County Councils Network said the fresh funds were much needed because the previous support package “has largely been swallowed up by councils paying their social care providers higher fees to meet increases in their costs, particularly for agency staff and personal protection equipment”.
More than 100 care home operators collapsed in 2018, taking the total over five years to more than 400.
Between 2014 and 2016 BDO found an average of 69 care home company insolvencies per year.
The number rose sharply to 123 in 2017 and another 101 collapsed last year.
Care providers claim they still face a huge funding shortfall.
They had originally expected councils to increase the fees they pay them by 10 percent to help cope with the extra costs.
However it is up to individual councils to decide the exact amount and The Telegraph has learned some councils have only raised their fees by five percent – although others have been more generous.
Nadra Ahmed of the National Care Association, which represents care providers, said the pressures of a global pandemic could increase costs for care homes by around 40pc and that this figure would likely increase over time.
Stephen Crisp, from The Optima Care Partnership, said his costs had spiked since the outbreak.
This will pile extra pressure on families who are already having to pay between £27,000 and £39,000 a year on average, according to research firm LaingBuisson.
Of the fresh cash injection from Government, Local Government Association Chairman James Jamieson said “we are pleased the Government continues to recognise the huge efforts councils and our staff are making”… and “alongside previous money and measures, this will give councils breathing space”.
A spokeswoman for NHS Digital said the agency “has been working to improve visibility of the situation in social care, by improving the quality and timeliness of Covid-19 SitRep (situation reporting) via their IT systems, where they have them”.
“We have been partnering with all the relevant system providers to enable faster, better quality and more useable information to be shared in a way which places a lower burden on social care at this difficult time,” she added.