On the home front

Care home owners are uniting to force local
authorities to raise fee levels. It is a desperate move but homes,
councils, and residents are running out of options. Ruth Winchester

The idea of joining forces to ensure a
particular economic outcome is not new. Since 1960, the cost of
crude oil, and hence that of petrol, has been set by a cartel of
oil-producing countries, Opec. What is new is the application of
that principle to the care of older people.

Faced with dwindling profits from their
businesses, owners of independent residential and nursing homes are
following Opec’s lead and ganging up on local authorities in an
attempt to dictate fee levels. Consortia of home owners are
demanding increases of up to 40 per cent on the local authority
weekly rate, and are refusing to accept local authority-funded
residents unless the higher rates are paid. In extreme cases, care
providers are threatening to evict frail elderly residents because,
they claim, their care is not being paid for in full.

In Stockport, an area whose fee levels are
already significantly higher than surrounding authorities, director
of social services Jean Daintith recently won a stay of execution
after a consortium of owners, representing more than 1,000 beds in
the area, threatened to turn away local authority residents unless
fees were increased by 9 per cent. A large national provider had
also threatened to close down its service within the area, which
would have meant the eviction of 70 elderly residents.

And on the Isle of Wight, director of social
services Charles Waddicor is facing court action by two care homes
that are claiming non-payment of fees. “Some members of the local
residential care association have been billing us for a higher rate
of care cost than we have said we will pay,” he explains. “Now two
of them have taken out a civil action against us, which will go to
the district court, claiming the higher amount.”

To add to the island’s problems, a nursing
home was also due to close on 11 January, leaving the authority
with insufficient beds to meet demand. As a result of the crisis,
Waddicor says that vulnerable older people may now have to be
placed two or three hours’ drive away from relatives and

Despite the difficulties, both Daintith and
Waddicor are sympathetic to the independent sector’s plight.
According to Waddicor: “My starting position is that I agree with
them, and I acknowledge that they are in severe difficulties,
particularly nursing home owners. It’s very hard to see how they
can run their businesses at a profit with the fees local
authorities have traditionally paid them.

“We are trying to raise the fee levels well
above inflation,” he says. “It would involve a 5 to 6 per cent
increase in council tax alone if we were to set the level of
funding at what we think the sector needs to be viable. That’s a
reflection of the seriousness of the situation -Êunfortunately
the government doesn’t seem to recognise how serious it is.”

The situation across the country looks likely
to get worse. Nationally the number of beds continues to decline,
yet observers are predicting an abrupt increase in the population
of over 85s as the post-world war one baby-boom starts to take

There seems little doubt that providers’ costs
are increasing beyond inflation, while fee levels barely keep up
with it. The introduction of the minimum wage and its subsequent
increase have hit many home owners, while the series of pay
increases for nurses over the past three years have impacted on
nursing homes. The impending new national minimum standards, which
take effect in April this year, are also driving many providers to
look hard at where their businesses are headed.

But are these care homes really going to carry
out their threats? Would any care home owner take the draconian
step of evicting frail elderly residents to face an uncertain

Nadra Ahmed is a residential home owner, and
chairperson of the National Care Homes Association. She describes
the threats as an act of desperation. “People have tried being
reasonable, now I think they are desperate. No one wants to do this
-Êit’s against our natures. It’s just that we have run out of

“We can’t provide good quality care on the
cheap -Êit’s just not possible. At the moment home owners are
subsidising local authorities for around £50 per week for
plain care. When people have aggravated conditions it’s more like
£100 per week. We’re getting between £200 and £250
in fees, and we need at least £310 per week -Êthat’s what
we need to provide 24 hour care. It’s all meals, laundry, heating,
lighting, maintenance. And the staffing increments have gone up by
10 per cent as a result of the minimum wage increase. We’re not
saying we don’t want to pay staff more, but our fee increases are 2
per cent, 3 per cent. That doesn’t even cover the increased salary

James Churchill, chief executive of the
Association for Residential Care, suggests that providers are
unlikely to do anything that threatens the well-being of residents.
But he says: “Most of them are good people who will not take this
kind of action. But occasionally the worm does turn, and in the
past I’ve advised people to do what they’ve threatened -Êto
take the person back to the local authority at 4pm on a Friday, and
to make sure the local press know what they’re doing. That usually
has the desired effect.”

Churchill adds: “I do feel a bit sad when that
happens -Êit’s deeply offensive to play God with someone’s
life. But sometimes you either play hardball, or you go out of
business, which means a lot more people’s lives are disrupted.”

Unfortunately, the people who lose out in this
tug of war are the residents and their relatives, and the impact
can be financial as well as emotional. There is evidence that
residents in some homes are having to top-up local authority fee
levels out of their own meagre incomes. Far more often, relatives
are having to fund the costs that the local authority will not
meet, leaving a new group of people facing an impoverished old

Sue Adams is acting chief executive of the
Relatives and Residents Association. She says: “The whole care
crisis has a horrendous effect. People have no choice -Êthey
are told there’s a bed and they have to take it whether or not it’s
what they want. And they are being asked to top-up local authority
fees by up to £200 per week -Êthat’s an extreme case, but
many relatives are certainly being asked for £70-£80 per

“We are hearing about staffing levels being
reduced, the quality of food being cut and the heating turned down.
Call bells aren’t being answered because of staffing.

“Residential care costs are being grossly
underfunded by local authorities, which is driving providers to
desperate measures. But it seems pretty drastic to threaten to
evict people as a result of a dispute going on between other

“I suspect that the Department of Health isn’t
too unhappy with the plethora of action groups and campaigns being
run because it gives them more leverage with the Treasury,” she
adds. “But ultimately the problem is that there’s not enough money
going into old people’s care. This is quite a youth-oriented
government, and old people just aren’t sexy.”  

– Help the Aged and Counsel and Care are
pulling together a broad-based coalition to look at the issue of
underfunding of older people’s services and the care home crisis.
For further information contact 020 7278 1114.

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