Social care is a vast and complex sector, made up of both complementary and opposing parts. On the one hand, you have children’s social care that has been the subject of multiple independent reviews in recent years; on the other you have social care for the elderly – a healthcare system in need of fundamental reform, but an issue that has been kicked down the road by politicians for decades.
In the middle sits adult social care, specifically designed for those people with learning disabilities, mental health issues and other support needs. Often losing the limelight to the more headline-grabbing sectors of children’s and elderly social care, it provides vital support for vulnerable individuals and much-needed respite for unpaid carers. Like its counterparts, it also requires much-needed attention and an injection of funding that is well spent. It is a complicated picture, bound by red tape and restricted by costly hierarchical and complex decision-making – a system that desperately needs to be reformed and slimmed down to help streamline services.
While each distinct sub-sector has its own unique challenges, what marries them together are common themes and pain-points that are not exclusive to one over the other. These include: recruitment, business confidence, output and demand, as well as the ability to grow and remain profitable.
In a bid to understand the sentiments of businesses, specifically in children’s and adult social care, Tristone Capital has carried out an in-depth survey to understand the views of individuals within the market across those key themes. The aim is to create a State of the Industry Report that provides us with a snapshot of the challenges and opportunities that exist in the sector.
‘The Social Care Snapshot 2024’ opens the door on a sector that offers so much to many, but is often hamstrung by the actions of others. But what drives companies, what keeps business owners awake at night, and what ambitions they have for the future?
Biggest challenges
Workforce challenges, combined with the rising costs of running a social care business, are two of the biggest pressures facing the sector.
‘The Social Care Snapshot 2024’ has revealed that recruitment and retention remain a significant priority for the sector, with more than a third of respondents (36%) admitting that they cannot hire enough people with the right skills.
The national picture shows that immigration remains the biggest workforce issue, more than four years after Brexit. Over a third of businesses (37%) stated that immigration restrictions stop them from recruiting enough people. This is compounded by the cost of recruitment, the high use of agency staff, as well as a COVID-19 hangover that continues to impact the jobs market. The difficulty of replacing staff after the pandemic spikes, in particular, in the North West at 60%.
The reality is, social care has lost a lot of good people to other sectors in recent years, and needs to regain a competitive advantage when it comes to talent and skills – a point not lost on a quarter of social care businesses that have placed investing in people as their biggest investment priority.
Previous Governments have tried and failed to tackle the issue. That’s why sector leaders believe that it’s essential Labour listens to the workforce challenges being faced by the industry and that politicians work collaboratively with business leaders to ensure it becomes an attractive career prospect for future employees. This includes ensuring that qualifications are robust and accessible, with more apprenticeships and training and development on offer.
Along with other sectors, managing the costs of running a business is also a significant concern to social care providers, according to the survey of more than 100 industry leaders. The national picture shows that managing costs is currently the biggest challenge facing the sector (35%), closely followed by accessing new sources of capital to fund growth (34%). This is mirrored across several regions in the UK, including the North West, the Midlands, the East of England and the South East, where 67% of respondents said that increased operating costs was the greatest pressure facing their business over the next six months – the highest of any region.
Social care providers have faced a litany of economic and political pressures over the last few years, driven by the COVID-19 pandemic and exacerbated by the cost-of-living crisis, while other external factors have contributed to creating a strained outlook that has been instrumental in how businesses function.
While inflationary pressures have eased in recent months, the damage has already been done for many, with more than a quarter of respondents (29%) admitting that this is the biggest challenge facing their business.
Hope and expectation
With a new Government now firmly in place, the state of the industry report has also highlighted a renewed sense of hope and expectation, with many seeing it as an opportunity to refine business priorities and approach the next six to 12 months with renewed purpose. Central to that is improving the outcomes of service users. More than a third of respondents (34%) ranked this as their top priority, peaking at 60% in both the North West and the East of England.
This is arguably the most important objective in social care, regardless of the political or economic backdrop; however, what is interesting to note is the added desire to grow and expand, with raising new finance for growth (32%) and opening new services (32%) making up the top three.
What is reassuring to see is, despite the ongoing pressures and questions surrounding profits, investment intentions are high, with businesses both nationally and regionally planning to inject capital in the next 12 months to meet growth ambitions.
It is those growth ambitions that will set the tone for 2025. Yes, there are sector-specific and wider socio-economic issues that will always heavily influence this market, but social care businesses clearly believe that they are also the masters of their own destiny and intend to set their own path, despite the endemic challenges that exist.
To read the report in more detail, visit our reports page.