One in three of Newcastle-upon-Tyne’s care homes will not receive any more council-funded places after a year-long row over funding.
Newcastle Council wanted providers to agree to fee cuts of between 1% to 3%, which it termed “more than fair” but 11 refused to sign new contracts without having fees inflation-proofed for the next three years.
It has now decided to suspend new admissions to these care homes, though 376 council-funded older people in these settings will continue to be remain funded.
The council said diminishing budgets had caused the fees to be cut, though it acknowledged that times were tough for the care home sector. It said it had no interest in endangering people’s businesses, but it had “put forward a price that we believe is more than fair and we aren’t prepared to budge further”.
“We have been negotiating since January 2010 around the amount of money we have to pay to care home providers in the city,” said Ewen Weir, executive director of adult services. “The majority of these businesses – 67% of the market – have accepted the price we offered, but we have been unable to reach an agreement with 11 care home providers.
“We simply cannot negotiate further and we feel it is important for the good of the sector and other suppliers to end uncertainty and concentrate our resources on those businesses we have reached agreement with.”
However, the move was attacked by provider body Care North East, which said it would fight the decision.
It said the homes targeted accounted for three-quarters of the city’s best care home places, as rated by the council’s own quality scheme, and warned that service users would be “forced into sub-standard residential care”.
It said the decision came out of the blue only days after council officials had appeared to indicate that they would pay the agreed rate for top-quality homes to reflect the standard of care.
Chairman Simon Beckett said: ““The council is legally committed to offering residents choice and if they carry out their threat to blacklist us they can no longer offer that choice”
“We believe the Council is trying to bully us into signing a contract that will pay us nowhere near enough for the standard of care we are providing,” he added.
The council added that it will look to introduce social enterprises into the care home market in the city, while its leader Nick Forbes is planning to write to care services minister Paul Burstow about the reductions in adult care funding from central government.
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