SCOTLAND’S care sector is facing a looming crisis as soaring numbers of charities pull out of contracts due to council cutbacks, is threatening to leave many vulnerable people without services, a devastating report has revealed.

Members of the umbrella body the Coalition of Care and Support providers in Scotland (CCPS) have increasingly been reporting that they cannot continue with contracts commissioned by public authorities such as councils and health board partnerships.

A fifth of its member charities providing services such as care at home and housing support for elderly or disabled people reported that they had handed back at least one contract in 2017. By last year that had risen to one third.

The report, commissioned from Strathclyde University by CCPS sought to find out why. It says failure to properly fund social care is driving some charities to the brink of extinction, which is combining with difficulties in recruiting staff to leave many deciding they cannot continue.

ANALYSIS: Time to admit we can’t pay for social care without major reforms

Annie Gunner Logan, CCPS director, said it was difficult to establish just how many charities were pulling out. "Our membership are responsible for £800 million of social care services. If a third are handing back work on an annual basis, you don't have to have the hard numbers to realise that is a problem," she said. "This phenomenon is increasing, that is incontrovertible."

Leading figures in the sector said the findings were significant and social care work was becoming unsustainable for many charities.

The report's authors say charities are 'handing back' contracts to provide social care mainly because they often cost more to provide than the commissioner is willing to pay.

Some cited other factors including an inability to recruit suitable staff, or the impossibility of sustaining an adequate quality of service, or all three.

Charities responded anonymously because many continue to have or hope for a working relationship with their local commissioning body.

But one large organisation said it had given up a major contract to provide social care when the deficit it built up providing care rose above £1 million.

Another said they had stopped because "we can't sustain subsidising public services any longer."

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The researchers spoke to major charities which had withdrawn from 47 contracts between them

Most of the contracts involved were for the provision of a range of support tasks in the person's own home.

The survey found many contracts placed charities in a vulnerable position by bidding to be on a list for work - with no guarantee of how much they would be offered, leaving them with little idea of how many staff to employ and an inability to plan ahead.

Other overheads such as training, sick pay and travel time are rarely convincingly built into the fees offered, they claim and annual increases to allow for inflation were rarely on offer.

Some of those giving up contracts had done so actively, informing their local council or Integration Joint Board that they were no longer willing or able to do the work.

Others gave up on work they had been doing for some time when asked to retender at a price or under conditions that they viewed as unviable

The report calls for more realistic funding which meets the actual costs of providing care, and a rebalancing of the relationship between commissioners and service providers.

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And it warns that the current commissioning model may conflict with the Scottish Government's Fair Work policy which aims to exclude zero hours contracts and ensure workers receive the Scottish Living Wage.

Charities criticised commissioners for being out of touch and lacking realistic expectations of what could be provided within a given budget.

"They think if they write it, it makes it possible," one charity said.

Meanwhile one charity felt some of those they were dealing with wondered why it had taken them so long to withdraw: “I think they almost admired that we’d given it a go," the charity told researchers. "But they were not surprised that we’d failed.”

Annie Gunner Logan said funders and commissioners should listen to the findings. "If they don't understand the reasons why contracts are being handed back there is a risk that a new provider will come in and have the same experience."

Meanwhile it was shocking that some charities had been asked to reduce the services provided to people in their homes, in order to be able to afford to pay staff the Scottish Living Wage, she said. "If you need to pay the living wage within a static budget, that has to lead to a reduction in people's support. We've raised this with the Scottish Government. It can't have been an intended consequence."

ANALYSIS: Time to admit we can’t pay for social care without major reforms

Charities were not simply being "petulant" at not getting the money they want or finding it difficult to make ends meet on a temporary basis, she said. "These are organisations which have been plugging away trying to make this work for years. We are not talking about sustainability any more we are talking about viability. They are saying 'if we don't do something about this it is going to affect the whole charity. We have to stop."

Andy Kerr, Chief Operating Officer of the Piper Group – a partnership between ENABLE Scotland and Sense Scotland – said: “All social care providers face the perfect storm of rising demand and rising costs, while income is not rising to keep pace.

"The current funding model represents huge challenges to make our sector sustainable, and we need to fundamentally change the way we fund and think about social care – including parity of esteem with the NHS and local government."

He said it was important charities ensure they are run efficiently. ENABLE Scotland and Sense Scotland recently came together in a strategic partnership, the Piper Group, in order to deliver savings and efficiencies which Mr Kerr says means they can re-invest in frontline services and have not yet had to hand back any of the services they provide. But the current situation is unsustainable, he said.

“The relationship between commissioning local authorities and charity providers has to be reset so that the vital contribution our sector makes to facilitating independent living for thousands of people across Scotland is properly appreciated, and paid for," he said.