Councils 'still falling short' on amount they are prepared to pay care homes

Homes 'could go out of business' in face of rising operational costs

The amount councils are prepared to pay care homes to look after elderly people is falling well short of meeting the operational costs providers face, according to figures published today.

Statistics from Laing & Buisson’s Annual Survey of UK Local Authority Baseline Fee Rates show that on average councils across the UK have increased the fees they pay to place an elderly person in a care home by just 1.6% for 2012/13. In the face of operational cost inflation of 2.5%, some could be forced to close as a result, the analyst said.

The survey shows that since 2010/11 fees being paid by local authorities have fallen by a cumulative 4.8% in real terms suggesting that the local government austerity drive is having a “significant” impact on attitudes toward state-supported care provision, Laing & Buisson said.

Care homes relay on a mixture of funding from private paying residents, many of whom sell their house to pay for care, and those whose care is funded by their local authority.

Laing & Buisson said this year’s settlements by local authorities are a “marked improvement” on those seen in 2011/12 – dubbed the “worse ever” in the history of the healthcare analyst’s records. However, the uplift continues a pattern which sees fee levels fall “significantly” short of the analyst’s ‘Fair Price for Care’.

The impact of this year’s fee movement means care home operators with UK-wide portfolios can expect margins on local authority funded residents to fall for a third successive year during 2012/13.

comments powered by Disqus