Care homes in south west England are under threat from a local authority fees squeeze, according to new research.
In a survey conducted by chartered accountants Bishop Fleming, 91% of care home owners said that staff costs had risen by at least 5% in the past year.
However, the firm said fees paid by councils had not increased over the same period, and that the survey found that 37% of care homes had seen a fall in profits.
The problem of cross-subsidy, where self-funding residents are charged more than council-funded users to cover the lack of local authority funding, was also identified by the survey.
Sixty-nine per cent said that they received less than £400 a week from councils to fund a full residential place, whereas only 13% said that they charged self-funders less than £400.
Bishop Fleming advises more than 50 care homes through its specialist care home team.
Team leader Tim Godfrey said: “These figures highlight the dilemma facing this region’s care home owners. Increased costs for utility bills and staff have not been matched by increased funding from the public sector.”
Care home closures
The survey results were released as care services and accommodation provider Brunelcare announced that it was closing two of its west country residential care homes.
Beverley Cottage in Burnham-on-Sea will close in mid-July and Cowlin House in Clifton will follow in September.
Brunelcare chief executive Helen Joy said that one of the reasons for the closures was that residents could not afford the necessary charges.
Fees not sufficient
She added: “About half of our residents pay privately and half are funded by social services. In both cases, the levels of fees we have been achieving do not enable us to cover all of the costs associated with running the home.”
In November last year, Age Concern calculated that care home residents were plugging a £500m funding gap through “top-up fees” and higher private fees because local authorities were not paying the market rate for care home places.
The charity said that government figures showed that more than one in three residents of care homes was being asked for a top-up fee, to supplement council expenditure.
Fairer Fee Forum
A campaign group – the Fairer Fee Forum – has been set up to campaign for increased funding for independent residential, nursing and domiciliary care providers.
DH tells councils: Efficiency targets no excuse for low fee rises