Care home residents who often spend their life-savings to live in homes that provide dignity when old age arrives are picking up the tab as councils slash what they pay for state-funded places.
The Competition and Markets Authority’s (CMA) study into residential and nursing care homes for older people has unearthed how Britain’s care home sector has a £1bn annual funding gap that could force several care providers out of business, even as demand rises from an ageing population.
The CMA found that some care homes are charging the elderly an up-front £5,000 even before vulnerable residents can move in.
With councils back-tracking on what they’re willing to pay, the bills have merely been collected by those able to pay from the life-savings or property pot they plan to pass down to their children.
The CMA report says that those able to pay their own way spend a staggering £846 per week on care in 2016 in comparison to the £621 per week charged for the homes for each subsidised person in care. This works out as a £12,000 more a year for those able to pay their way.
Janet Morrison, chief executive of Independent Age, says: “The care home sector urgently needs reform and the CMA’s findings add further evidence of the need to put in place a long-term solution, while also addressing the needs of older people in receipt of care today.
“The green paper promised next year must address the systemic problems described in this report if it is to provide a meaningful solution to the social care crisis.
“However, it’s imperative the government acts on these recommendations in the short term too and urgently addresses the widening funding gap that results in many older people being denied the care they so desperately need.”
According to the CMA there are about 410,000 residents in 11,300 care homes for the elderly across the UK but almost half of residents get some level of local authority support, from fully subsidised fees to top-up payments.
A quarter of care homes are “at risk of failure or exit” as more than 75 per cent of their residents are paid for by local authorities, making the cuts all the more damning as the loss is expedited across a larger set of non-paying residents.
As life-expectancy increases the CMA report estimates that if local authorities across the country were to pay, the full cost of care would work out to between £900m and £1.1bn a year. The study found 12,000 more care home beds are needed just to keep pace with the demand.
In the report, CME chief executive Andrea Coscelli, says: “Care homes provide a vital service to some of the most vulnerable people in our society.
“However, the simple truth is that the system cannot continue to provide the essential care people need with the current levels of funding.”