Hospices facing mounting cost pressures

Hospices are facing soaring energy costs, while fuel, food and the cost of paying a fair wage to their dedicated staff are all increasing.

We spoke to our hospice members to find out how the surging running costs are affecting them. Nearly all hospices (96%) are budgeting for a deficit in 2023/4.

Rising energy and staff costs are the two biggest factors stretching hospice finances to the brink.

Energy bills are set to increase by £29 million over the next year. Nearly nine in ten (86%) hospices will have come to the end of a fixed price deal by the end of the year. Global events mean new deals are increasing in price by up to five times.

At the end of March, the government is reducing support for hospices with their energy costs. From next month, hospices will receive only a modest discount – the same level as a pub or restaurant, and less than zoos and museums.

But unlike businesses who can pass costs onto customers, hospices will have to fundraise more from local communities to cover this. The outlook is gloomy given people are also feeling the pinch and charity giving is expected to fall

The cost of paying brilliant hospice staff is also rising. Hospices recruit from the same pool of staff as the rest of the NHS, meaning they need to try to match NHS salaries.

When NHS wages go up – as is likely given current negotiations – hospices will again have to find funds from their local community.

Hospices are committed to paying their staff a fair wage, but to match the NHS pay offers currently on the table around the UK would cost hospices around £120 million extra for this year and next. Without government support, hospices would again need to find these funds through charity shops, marathon runs and bake sales.

Rising costs are having a huge impact on hospice finances. Unless further funding is found, services will be at risk.

This could mean fewer patients supported by hospices at the end of life. In turn, that means greater pressure on the NHS as those patients turn back to hospitals and other NHS services for end of life care.

From our survey of 101 hospices, we also found:

• 7 in 10 hospices agreed that cost of living pressures are highly likely to result in reduced support being available to the wider health system, such as hospitals or care homes.
• Nearly half (46%) of those with in-patient units agreed that cost of living pressures are highly likely to result in one or more in-patient bed(s) being temporarily or permanently unavailable. Nearly a quarter have already reduced, or plan to reduce, the number of in-patient beds in operation.
• More than a quarter have already delayed plans to introduce or expand services with a further 15% planning to.
• Despite rising costs, fewer than 1 in 10 hospices received uplifts of more than 5% to their NHS contracts in the last year. For 38% of hospices, their statutory income stayed the same or reduced during this period.

Hospices care for some of the most vulnerable people in society. But many are now worrying about the future of their services. 

They provide care and support to 300,000 people a year across the UK. Their work is an integral part of our health system which remains largely funded by charity.

On average, two thirds of adult hospice income and four fifths of children’s hospice income is raised through fundraising.

Hospices need urgent support to ensure they can deliver high-quality care for people at the end of life – without worrying about how to keep the lights on or keep vital machines running.

Hospice UK is calling for immediate action from the UK Government so that hospices can continue to deliver vital services to those in need.