Sun, 25 September 2022

Newsletter sign-up

Subscribe now
The House Live All
Environment
Press releases

Care Homes Facing 1,000% Rise In Energy Costs Say They Could Be Forced To Close

Care Homes Facing 1,000% Rise In Energy Costs Say They Could Be Forced To Close

Care home groups have said rising energy bills could force closures (Alamy)

5 min read

Care home providers have warned they could be forced to shut down if they do not receive urgent support from government because of "unsustainable" energy costs.

Leading figures in the care sector have said that newly appointed Prime Minister Liz Truss must take immediate steps to protect care homes and hospices in her upcoming energy plan after providers said their current energy costs were "without precedent".

Truss is planning a major intervention on energy bills after she promised to make tackling the UK's energy crisis her immediate priority after entering Downing Street earlier this week.

Initial reports suggest proposals, which will be set before Parliament on Thursday, include a freeze on the domestic energy price cap, and a reported £40bn support package for business. But ministers have not yet indicated whether organisations such as care homes – which currently have uncapped energy bills – could also see some form of freeze introduced.

Care and other social service providers have been especially hit by the recent surge due to their typically higher requirements for heating, even during warmer months.

Nadra Ahmed, executive chair of the National Care Association, told PoliticsHome a new cap should be introduced to protect the care sector from "unsustainable" costs.

"The increases providers face is more than 500 per cent and in some cases as high as 1,000 per cent, which is unsustainable," she said. 

"Our services are 'home from home' for vulnerable people who can no longer be supported independently, so that service becomes their home for life.

"With that in mind it is critical that providers are offered the same support as households and price caps are applied to them."

The NCA, which represents small and medium-sized care providers, has heard multiple warnings from their members about the rises, which in some cases are forecast at over 1,000 per cent.

"We will have a bill which will be around £12,000 a month, and we are not making £5,000 a month in any case," one care provider, who preferred to remain anonymous, said. 

"I am not bothered about prices going up if there is some way I can fend the situation off but there is no way to make the care home operate going forward with these enormous costs which are without precedent."

A senior staff member at a residential care home in Sussex who also did not wish to be identified, which provides care to 28 residents, said without further support they would find themselves in an "almost unsustainable position when energy prices increase".

"Our home has to be heated 24/7 and we care for some of the most vulnerable adults in our society."The manager of a care home in Somerset, who did not wish to be named, said the "crisis" in the energy markets had made it difficult to secure new contracts, claiming their yearly indicative costs for gas were forecast to rise from £9,000 to £115,911 – a rise of almost 1,200 per cent.

The NCA's Ahmed felt that care providers like these had been neglected by ministers as she urged Truss to implement a cross-government approach to protect the sector.

"Smaller providers across the country often suffer as they are continually ignored when it comes to announcement of tangible support to mitigate growing pressures on small and medium-sized businesses," she said.

"We would urge the PM to create a multi-departmental approach to support social care provision."

Other social care providers, including hospices, have also called for further support in the upcoming energy plan, with Jonathan Ellis, director of policy, advocacy and clinical programmes at Hospice UK, saying the cost of living crisis was a "huge concern" to the industry.

"We estimate that hospices are likely to face overall additional costs of around £115m per year, which equates to £2m per day," Ellis told PoliticsHome.

"Such additional costs are unfunded, and would need to be met either by raising more money from already stretched local communities, or by making savings elsewhere."

Ellis said rising staff wages and employer National Insurance Contributions had also added to the burden facing the sector, as he called on ministers not to "exclude" them from any wider support for the health system.

"Hospices are providing essential health care services, in partnership with the NHS yet they have to rely on selling second hand jeans and supporters running marathons to be able to meet the growing need for end of life care in this country," he said.

"This would be unacceptable in any other area of our healthcare system, and it shouldn't be acceptable in end of life care either."

Truss has faced criticism over her decision to scrap the planned increase on National Insurance Contributions announced by former chancellor Rishi Sunak earlier this year in a bid to raise around £12bn for health and social care services.

But speaking on Wednesday, new Health Secretary Therese Coffey insisted the funds would still be provided through increases in general taxation.

Responding to the comments from care providers, a Department of Health spokesperson said: "We understand that people are struggling with rising prices, and while we can't shield everyone from the global challenges, we will continue to support businesses, including care homes, in navigating the months ahead.

"We have made over £1bn available specifically for adult social care this year via the Local Government Finance Settlement.

"Small businesses already benefit from a reduced rate of VAT for the energy they use."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Read the most recent article written by John Johnston - Kwasi Kwarteng Tears Through UK Tax System In Radical Fiscal Event

Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now