No respite for care homes as council fee rates fall again

The latest figure signals "dangerous trend" in falling council rates for care homes, says market analyst LaingBuisson

Care homes are under increasing pressure as council fee rates fail to keep pace with inflation, market analysis firm LaingBuisson has said. The fees for older people’s care homes have risen by just 1.7% this year, falling well below the firm’s 2.4% estimate necessary to keep up with care home cost inflation.

Council fees

Last year there was a near-inflationary rise of 1.8%, following three years in which local authority fees had not kept up with inflation, which slightly relieved the pressure on providers, LaingBuisson found. However, the figures from this year’s annual survey of the usual costs UK local authorities pay for care suggest the gap is widening again due to the continuing impact of council budget cuts, with 73 of 143 councils sampled giving a rise of below 2%.

LaingBuisson found that 21 were freezing fees, 31 had provided a rise between 2 and 2.9% and just 17 had increased fees by 5% or above. Of the remaining 65 UK councils, 23 said they had not yet set new fees and the others did not respond.

The results also showed that a number of authorities in the West Midlands had increased fee rates by 5% or more and Solihull stood out as giving a comparatively “enormous” rise.

But the firm warned that the new findings signal the continuation of a “dangerous trend”, which has seen fee rates fall significantly since 2010-11. It said that this would add to the financial concerns already facing providers, including the recent decision to introduce special measures for failing care services. LaingBuisson predicted that, at best, fees will remain static in real terms in 2015-16.

David Pearson, president of the Association of Directors of Adult Social Services, said in response to the survey: “Laing and Buisson acknowledged a small uplift last year, demonstrating a willingness to increase fees to providers where possible. However, as the National Audit Office report published in March 2014, said, ‘need for care is rising as public spending is falling, and there is unmet need’.

“Councillors and providers alike are experiencing the challenge of reduced funding whilst need increases. We advise local authorities and social care providers to work together and plan for services in their area taking account of the costs of local care.”

A Local Government Association spokesperson said: “Local authorities work alongside providers to agree fee levels that reflect the stark financial pressures both are facing. Cost models are also being developed to enable greater understanding or the demands facing councils and providers.”

The survey also looked at the number of councils using quality criteria to pay higher fees to well-performing care homes and lower fees to poorly performing ones. It found that 12% of council respondents made additional quality-related payments, with the 32 Scottish councils making up the majority of these.

This data compares with three-quarters of local authorities that claimed to offer quality payments in 2010. LaingBuisson said this change was due to the fact that many of the historic quality payments were based on the Care Quality Commissions now defunct ‘star ratings’ system.

LaingBuisson concluded that there might be a market shift in favour of providers before the end of the decade, but in the meantime any care homes heavily reliant on council funding would have to mitigate the impact by making savings, including to staffing.

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3 Responses to No respite for care homes as council fee rates fall again

  1. Geoffrey Cox MSc LLb July 23, 2014 at 11:25 am #

    LaingBuisson’s conclusion that ‘care homes heavily reliant on council funding would have to mitigate the impact by making savings, including to staffing’, is absolutely not an option. In fact CQC, and Local Authorities are demanding significant staff increases to meet the increasing complexity of need, which is a far bigger factor than simply keeping up (or not) with inflation.

    A reading of any of the reports of recent years, (and there are many) of which Francis, Berwick and Keogh are 3 illustrate that we are not learning, or acting on the learning from Mid Staffs in either Health or Social Care, with mounting disastrous consequences. I doubt also that even the best Local Authorities and Providers working ever more closely together can resolve this and this is a national, political and financial challenge that we as a society must decide to take on or continue to ignore as we have done.

    It is a simple choice, a simple yes or no. Either we are prepared as a country to take care of our elderly, and better as they richly deserve, or not, as we continue to withdraw relentlessly from caring from people in terms of numbers, quality and intent, whilst we scapegoat those caught up in a failed system and scare off the people we desperately need to make it want we demand it to be.

    If we have a genuine concern for the elderly, our parents, we need to plan now, this year, for the future and I shall be listening intently to the healthcare leaders and politicians over the coming months.

  2. Gerald July 24, 2014 at 6:57 pm #

    Mr.Cox is spot on the major problem is that The Local Authority in collusion with the Health Authorities have changed the criteriors on a number of occasions the resultant being to make previously Nursing Home patients who received funding from the NHS no longer eligible and therefore “means tested” this of course does not apply if the person stays in a hospital costing the tax payer considerably more and bed blocking to boot.
    The whole system is protect pay and jobs in the Public sector at expense of tax payer.

  3. susan wills July 29, 2014 at 9:54 am #

    You would believe that Health and Adult Social Care commissioners were responsible for reporting to Health and local authority leads the current problems in the Care Home Sector. Poor fees are currently destroying the care home sector. In light of another Panorama programme and the serious demonising of our service it saddens and disheartens me that we cannot as a group of interested parties join together and acknowledge that the primary cause and in fact root cause of the problems reported is under funding.

    As a Registered Manager the job is virtually impossible. Based on income and on outcomes required this cannot be done. My concern is that there are a lot of very qualified people in this sector who cannot make the service work because of the poor cost of care ! No matter whom I deal with daily from one professional to another most lack any respect for the care home sector ! What a sad world we live in when we under invest and then have the contradiction of someone telling us that CQC intend to become more robust in their inspections….we are not magicians we cannot create best practice with no resources its impossible. I agree with regulation standards and quality. I agree with providing the best possible care to those in our care, but it cannot be done on the fee structure currently in place. I believe under funding drives us into safeguarding.