Care home funding gap will result in divide between rich and poor areas, providers warn

A shortfall in English council funding for care homes, which leaves providers reliant on private-paying residents, is creating a “postcode lottery” in care quality, the head of representative body Care England has said.

Data released today by researchers LaingBuisson suggests the average fee per resident paid to care homes by local authorities falls short of service provision costs by more than £100 a week.

This situation, according to LaingBuisson’s analysis, means residents who self-fund their care are filling a funding gap of £1.3 billion a year.

The National Living Wage and requirements to employ more carers to support residents with increasingly complex dependencies have fuelled an “inexorable rise” in care home costs, said LaingBuisson founder William Laing.

Fees being paid to homes by councils averaged £486 per resident per week in 2016/17, against a minimum requirement of £590 in order to generate a “reasonable return”, according to the company.

‘Two-tier’ fears

Research published last year identified a steady rise in insolvency among care home providers between 2012/13 and 2014/15.

Martin Green, Care England’s chief executive, told Community Care that the finance gap highlighted by LaingBuisson risks accelerating the creation of a “two-tier” system in which only those who can afford to pay for it will receive good quality care.

“Already, new homes are mainly in affluent areas,” he said. “Where they are closing, it’s in regions [where homes are] predominantly funded by local authorities.”

“This points to a situation in which high-quality care is available to those who can pay, and is less and less available in areas without much private wealth,” Green added. “What you will then see, in those areas with a real problem around the funding of social care, will be hospitals falling over because they will be clogged with older people with nowhere to go.”

‘Universal concerns’

Izzi Seccombe, chair of the Local Government Association’s community wellbeing board, said “urgent and genuinely new government funding” was required to prevent care providers leaving the market or going bust.

“Councils, care providers, charities and the NHS are all united around the need for central government to fully fund adult social care,” Seccombe said. “This is essential if we are to ensure people can live independent, fulfilling lives, as well as alleviating the pressures on the NHS.”

Margaret Willcox, president-elect of the Association of Directors of Adult Social Services (ADASS), agreed that LaingBuisson’s findings reflected “universal concerns” about the escalating crisis in adult social care.

While acknowledging regional disparities, she said that two-thirds of councils had reported residential and nursing home closures in their areas, despite 82% of authorities increasing fees paid to providers over the past year.

‘Tipping point’

“Councils are doing all they can to protect adult social care but reductions in funding and the cost of the National Living Wage, while welcome, means many providers are finding it hard to recruit staff,” Willcox said.

“Without significant, sustainable and long-term funding, the funding crisis means thousands of older and disabled people, their families and carers will face an increasing struggle to get the care and support they need, NHS delays will continue to increase, more care homes will close and there will be more gaps and failures in the provider market.”

Andrea Sutcliffe, the Care Quality Commission’s chief inspector of adult social care, said the new data underlined the findings of the CQC’s 2016 State of Health Care and Adult Social Care report – that the sector was approaching a “tipping point”.

“The issues we raised of variable quality, unmet need, reducing capacity and providers struggling to improve have rarely been out of the headlines since,” Sutcliffe said. “The financial pressures are real but the priority has to be on how we use available resources to deliver good quality care and make a difference for people using services, their families and carers.”