Most care homes struggled but some paid more to shareholders, says the Warwick University-led study.
Many care home staff worked extra hours without extra pay to prop up the system during the pandemic, a study suggests.
Public money helped stabilise UK care homes during the first wave of Covid-19 but it was withdrawn too soon and not focused on staff, says the research, led by Warwick Business School.
While many homes struggled financially, some larger companies were able to pay more to shareholders, the study found.
Ministers are discussing reforms to adult social care across the UK.
The researchers studied the accounts of more than 4,000 UK care home companies, from just before the pandemic and during the first year of the health crisis.
They found nearly two thirds (60%) of care homes were already financially fragile as the pandemic took hold.
The report, co-written with University College London and the Centre for Health and the Public Interest think tank, accuses the government of failing to plan for “highly predictable” damage to the sector’s financial viability during a pandemic.
An extra £2.1bn of public money pumped into the sector at the peak of the pandemic helped many care homes avoid financial collapse, but not all of it reached the front lines and most of the payments ended in 2022, say the authors.
The impact on staff varied:
- some zero-hours staff lost their jobs as bed-occupancy declined
- other staff worked more hours but lost income, as extra hours meant less in benefits
- hourly pay across the sector did not typically rise
In the first year of the pandemic, 122 larger, for-profit, care home companies were able to pay shareholders 11% more in dividends than the previous year, the research found.
Living at work
The majority of care home companies are small, like the one operating St Brelade’s in Herne Bay, Kent.
Staff here gave up their private lives to keep residents safe as the pandemic took hold.
“I lived here for three weeks,” says Nicola Helman. “Then I was in every single day after that, for another four weeks”.
Nicola also went to great lengths, when off-duty, to avoid picking up Covid, stressing she “didn’t communicate with anybody, didn’t pass anybody or anything like that”.
St Brelade’s owner, Larry Berkowitz, worked hard to support staff and residents.
He says the government subsidy helped ease financial pressures during the first year of the pandemic, but things became far tougher once it was withdrawn.
“Inflation really kicked in. Everything had become much more expensive… so now you had less revenue, less subsidy and high expenses.”
Locally, at least three care homes have closed since 2020, he adds.
The report concludes: “The decision by government to end financial support for care home companies after the peak of the pandemic had passed has likely contributed to the current financial and operational difficulties experienced by the sector.”
It states the financial plight of many staff and the immense pressure they were under “means it is not surprising the care home sector has struggled to both recruit and retain staff once lockdown restrictions were removed and the wider economy re-opened”.
The Department of Health and Social care responded that it is supporting social care in England with up to £7.5bn over two years, and its latest social care plans were published last week.