Shortfall in care home fees cause concernThe fees paid by local councils to care home providers no longer cover the costs of meeting basic standards of care set by the official regulator in England, according to a new report published by Bupa.
In the report ‘A Fair Deal', analysis shows care home fees paid by councils have fallen by 3.9% in real terms over the last two years, hitting providers at the same time that care homes have been facing large increases in their main costs - utilities, people, and food - and compounding the long-standing problem of chronic under-funding in the sector.
The report, based on research by Laing & Buisson, also shows that fees will need to rise between 5% and 8% per year - an increase of up to £41 per person per week each year - to support care home providers in meeting standards and maintaining a sustainable sector. It estimates that an extra £1.7billion is needed in total over the next three years to fill the funding gap.
Managing Director of Bupa Care Services, Mark Ellerby said: "Efficiencies have already been made in every area of care and still, meeting basic standards within current council fee levels is extremely challenging. We want to invest in our care homes and our people, and find new ways to raise standards so we can all access the level of care we would expect in old age. But five-star service can't be provided at zero-star prices. Councils pay for more than half of residential care home places so thousands of elderly people are currently being looked after by providers who are trying to make the best of a bad situation. It's just not tenable in the long term.
He added: "We need the government to ensure English councils reverse the trend for falling fees now, and increase and ring-fence funds to avoid any extra money being diverted to other uses."
Baroness Greengross, chair of the All-Party Parliamentary Group on Dementia and chief executive of ILC-UK said: "Older people have contributed to this country through their taxes, their hard work and their sacrifice. Budgets are tight but we need to give older people's care the priority it deserves. That starts with providing a fair level of funding to providers to allow elderly people to be well looked-after when they need it most."
Some 94% of Bupa's care home residents have a medical reason for admission and more than three-quarters have some form of neurodegenerative disease. Care at home is, therefore, not an option for the overwhelming majority.
The Commission on Funding of Care and Support, led by Andrew Dilnot, which published its report in July 2011 examined ways to assist people who fund their own care costs. It recommended that the government should place a cap on the amount that individuals have to finance themselves, with government stepping in to meet care costs above that level.
While this was welcome for these who pay for their own care, it did not help the majority of people in residential care with no assets who rely on state support to fund their care.