Handing Back Contracts: Exploring the rising trend in third sector provider withdrawal from the social care market
The purpose of this report is to explore the experiences of and issues associated with processes of handing back social care contracts by voluntary sector providers of services. The report builds on findings in CCPS's 2017 Business Resilience Survey which found that 10% of providers were considering withdrawal from contracts, while 33% had already acted in this way. Moreover, a further 65% of providers in the CCPS Business Resilience Survey revealed how they had withdrawn from or decided not to participate in procurement exercises in the previous year.
Findings The financial viability of individual contracts and the implications of persistent deficits on the overall financial wellbeing of provider organisations, especially the draining of reserves, was often seen as the key reason behind management’s decision to withdraw.
Failure by the social care system to adequately fund the Scottish Living Wage was highlighted as an important factor for organisations falling into deficit, and draining their reserves
In roughly half the examples of service withdrawal, the hourly rates were considered to be too low, with some even failing to match providers’ actual direct costs
The uncertainty associated with the fluctuating volumes of work flowing from framework agreements was perceived to be even more pronounced in relation to self-directed support (SDS) services. Several respondents saw SDS as epitomizing the trend towards risk shifting from local authorities to providers.
The quality of services provided was another key consideration in withdrawing from service provision. Organisations withdrew from contracts where the parameters of service provision had changed in ways that they felt were incompatible with their values and standards.
Prior to withdrawal from contracts, providers reported they had to deal with a number of employee resourcing and relations problems. Specifically: • Significant recruitment problems. • Deteriorating terms and conditions of employment. • Unpaid time and work. • Uncertainty and insecurity in employment.
Significant efforts were reportedly made to support the transfer of services through either seeking out potential alternative providers and/or liaising with them to minimise disruption to the services users received.
