Nursing homes are facing a credit crunch and banks are refusing to lend money or provide new services for fear that the care sector is on the verge of collapse, senior care leaders warned.

A survey of care providers in Hampshire found that 20% had been told that their bank was concerned about their long-term viability. Several reported that their bank said they “had no appetite for the care industry” and had refused basic services such as additional accounts.

Nadra Ahmed, president of the National Care Association, said providers elsewhere were under similar pressure. “We have not seen polls, but I know that these conversations are beginning to take place across the country with all the banks. Some a little more aggressive than others. We are definitely hearing that suppliers are starting to feel the pressure. “

Care providers are reluctant to disclose any problems to their clients from local authorities or to the Quality of Care Commission for fear of being subjected to special measures or losing care contracts. Nearly half of the nursing homes that responded to the Hampshire Care Association (HCA) survey said they were concerned that the current crisis could put them in a high-risk position with their bank or lender.

A fifth reported that their bank or lender had contacted to raise these concerns directly. While some banks provided support, others pressured them, including sending “threatening letters,” said one provider, who expressed concern about the long-term viability of care providers.

The report quoted providers as saying that the banks did not want to work with adult social care organizations. “[We were] said the bank has no appetite for the care industry, “said one vendor. “[They raised] he refers to the re-longevity of nursing homes as a viable business, ”said another.

Andrea Pattison, a member of the HCA executive board who led the survey, said: “This is not just a problem for one or two banks or one or two providers. Most of the sector is made up of small and medium-sized companies, and the government must intervene to prevent banks from running viable businesses, imposing adverse conditions, or withdrawing funds.

“Failure to do so would be a threat to the adult social care industry in general and by extension the NHS, which relies on us to provide excellent care.

“It was a shock to hear providers say that their banks were not interested in welfare as a sector. That was extremely worrying. “

Ahmed said the crisis in social care was becoming increasingly acute. “Any resistance that vendors had, prior to Covid, eroded due to the fiasco around PPE and everything we’ve been through before the funds were available,” he said.

On September 30, the Infection Control Fund, a £ 600 million fund to pay for personal protective equipment for welfare companies, will end. “We don’t know yet if that is going to continue,” said industry body Care England.

The gas price crisis and labor shortages are also putting pressure on social assistance, Ahmed said. “The heating does not turn off in a nurtured environment,” he said. “This is a time of reckoning. As a matter of urgency, the secretary of health must seek to create a sustainable social care market and close the gap between resources and demand, not only money, but also the labor force. They are exhausted and anxious and offered higher paying jobs as Amazon delivery drivers. “

The survey comes after months of concern in the industry that insufficient financial aid during the Covid pandemic will bankrupt nursing homes and home care providers, leaving vulnerable people without care.

Liberal Democrats’ analysis shows that social care services are facing a £ 1.7 billion Covid black hole. Local authorities in England spent £ 3.2 billion on adult social care during the first year of the pandemic, with the money earmarked for personal protective equipment, additional workers and to deal with additional demand. However, they received just £ 1.49bn of additional Covid-19 funding from Westminster, according to Lib Dem figures based on research from the House of Commons library.

“More than 1.5 million people are now missing the care they need and many are stranded in the hospital, unable to leave because follow-up care is simply not there,” said Lib Dem health spokesperson Munira Wilson. MP.

UK Finance, which represents banking, said the survey did not reflect its conversations with people in the industry. A spokesperson said: “Lenders understand the current pressures on the welfare sector and are actively supporting viable businesses. As responsible lenders, finance providers will regularly check in with their clients to check on their status and see if assistance may be required. “

The government said it would encourage banks and lenders to take a flexible approach with their clients. Local authorities would have access to sustainable funding for core budgets in the spending review.

A government spokesperson said: “We are committed to providing world-class social care, and new £ 5.4 billion funding for the sector will launch comprehensive reforms that are sustainable and fit for the future.”

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