Hospices face ‘devastating’ financial crisis as staff costs rises, charity warns

Hospices are facing a “devastating” financial crisis because of rising staff costs which are putting services at risk, a charity has warned.

The chief executive of Hospice UK, Toby Porter, said the last year had seen the “worst financial results for the hospice sector in around 20 years”.

Sector leaders have called for the Government to provide more funding, with one saying the most recent increase of 1.2% “is not fair and is not right” when inflation and a “staggering” rise in costs is taken into consideration.

The UK hospice sector is reporting an estimated collective deficit of £77 million for the 2023-24 financial year, according to Hospice UK’s quarterly financial benchmarking survey.

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The national charity for hospice and end of life care said the shortfall was being driven by staffing costs as charitable hospices struggle to match NHS pay rises, with the majority of hospice expenditure spent on salaries.

The Hospice UK survey revealed that payroll costs have surged by 11%, with approximately £130 million in additional spending over the full year.

Hospices recruit from the same pool of staff as the NHS, meaning they aim to match health service pay and conditions to “attract and retain skilled staff to care for people at the end of their lives”, the charity said.

Mr Porter said the results of its survey were “unsustainable and extremely worrying”.

He added: “These are the worst financial results for the hospice sector in around 20 years. Many hospices are spending more on their care than they receive in income.

“Costs for hospices will keep rising and without a new model for funding end of life care, the coming years could be devastating for hospice care services, particularly for those in economically challenged areas.

“Many are already considering halting vital services which will have devastating consequences for patients, their families, hospice staff, local communities and the NHS itself.”

Tony Collins, chief executive of Saint Michael’s Hospice in North Yorkshire, said: “With our costs rising at a staggering rate and inflation hitting over 8%, to be met with a rise in Government funding of just 1.2% is not fair and is not right.”

Mr Collins added: “Our funding gap alone is half a million pounds, we know hospices up and down the country are experiencing the same funding gap too, and together we must be heard.

“Dignity in dying and high-quality end of life care isn’t a privilege, it’s a right.”

Adult hospices receive on average around one third of their funding from the State, with children’s hospices getting around a fifth.

This means most of the funding for essential hospice services comes from fundraising and charitable donations, Hospice UK said.

Graham Gardiner, chief executive of Ardgowan Hospice in Inverclyde, said it was “deeply disappointing” that Government funding and support for hospice care was no further forward.

He added: “With no increase in support, hospices like ours are forced to shoulder extra costs through relentless fundraising efforts.

“The need for change and increased support from those in power is urgent to ensure that hospices can continue to provide essential care within our communities.

“We can’t allow dying with dignity and compassion to become a luxury that only the rich can afford.”

A Department of Health and Social Care spokesperson said: “We want everyone to have access to the high-quality, personalised palliative care that can make all the difference at such a difficult time.

“That’s why we require all local NHS integrated care boards to commission end-of-life care services to meet their patients’ needs.

“While the majority of palliative and end-of-life care is provided via GPs, hospitals and community health services, we recognise the incredibly valuable role the charity sector plays in providing hospice care and supporting loved ones.

“Most hospices are independent, charitable organisations with their own terms and conditions of employment.

“The Government has provided £60 million in additional funding, including to some hospices, to deliver one-off payments to over 27,000 eligible staff employed by non-NHS organisations.”

MPs will debate hospice funding in the House of Commons on Monday during a backbench business debate called by Peter Gibson.

The figures in Hospice UK’s financial benchmarking survey are based on nine months of accounts for the financial year 2023-24 from a sample of 86 hospices.

They are extrapolated to be representative of the entire UK hospice sector, which supports 300,000 people annually.