Care Homes on the Brink – Financial and Workforce Pressures Threaten Sector Stability
UK care homes are under mounting pressure. A perfect storm of rising costs, staff shortages, and restrictive immigration policies is putting the sector at risk, and many providers say they may not survive the year.
Across the country, care home operators are warning that without urgent reform, services for the elderly and vulnerable could collapse. The signs are already here.
Care Home Funding Crisis: Rising Costs, Shrinking Support
One of the biggest threats to the sector is the growing care home funding crisis:
Local authority funding is not keeping up. Around 70% of care home beds are funded by councils or the NHS, but the fees paid often don’t cover the real cost of care. This forces providers to rely more on private-paying residents, which isn’t a sustainable model. For a medium-sized care home with 50 employees, these changes could mean thousands of pounds in additional annual expenses.
Wage bills are soaring. In April 2025, the national living wage increased to £12.21 per hour, with another rise expected in 2026. Employers are also facing higher National Insurance contributions. According to The Times, this will add hundreds of thousands in additional costs for some providers.
Staff Shortages in UK Care Homes
The sector is also grappling with serious care home staff shortages. And it’s not just a numbers game, the recruitment pipeline is being choked by policy decisions.
Immigration rules are tightening. Employers are now expected to prioritise UK-based candidates before recruiting from overseas, even when local applicants are in short supply.
Visa-based exploitation is on the rise. A Financial Times investigation found that over 25% of overseas care workers recruited on health and care visas ended up with employers who later lost their sponsor licences. This leaves workers stranded and care providers short-staffed.
The result? Burnout, high turnover, and an even deeper recruitment gap.
Nearly Half Scotland’s Care Homes at Risk of Closure
The care home crisis in Scotland is even more stark:
- 48% of residential and nursing home operators in Scotland say they could close within the next 12 months, according to a Care Home Professional survey.
- 90% of providers say they’ve experienced cuts to local authority support, and many describe the sector as “on the brink”.
If closures escalate, thousands of vulnerable residents could be displaced. Those in need of care will struggle to find support.
How Syncurio Supports Financial Stability and Workforce Management
In this tough climate, care homes are turning to better systems to manage resources, staffing, and compliance more effectively.
Syncurio is one of the tools helping operators adapt. It’s a cloud-based care home management platform built by people who run care homes themselves and designed to tackle exactly these challenges.
Here’s how it helps
✅ Reduce staffing costs and streamline HR
With Syncurio’s HR module, homes can:
- Optimise staffing with drag-and-drop rostering
- Automate UKBA visa checks and right-to-work alerts
- Reduce agency spend by offering open shifts directly to employees
- Track payroll, overtime, and holiday balances in one place
✅ Simplify billing and gain financial clarity
The Residents module offers:
- Automated invoices, fee tracking, and billing by funding source
- Contract bed and occupancy reporting
- Real-time EBITDA forecasting and accounting integrations
✅ Built by care home operators, for care home operators
Syncurio was designed by people who’ve lived the problems, not just observed them. The result is intuitive, care-specific software that solves real issues around staffing, compliance, and financial health.
Call for Sustainable Care Reform
The current model is not working. To protect the future of UK care homes, we need:
Investment in the workforce from better pay and working conditions to clear career progression. This will attract and retain talent in the sector.
Sustainable care funding that reflects the true cost of delivering high-quality care, not just short-term funding boosts.
Immigration policy reform that enables safe, fair, and fast overseas recruitment to plug staffing gaps.
Looking to reduce costs, manage your workforce better, and gain financial clarity?
Book your personalised demo today:
- 020 4525 0299
- [email protected]
See why care homes across the UK are choosing Syncurio to make their administrative processes more efficient, synchronised and stress-free.
