From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Social Care crisis – shocking figures reveal discrimination against privately-run care homes

    Social Care crisis – shocking figures reveal discrimination against privately-run care homes

    • Shocking figures suggest councils are discriminating against privately-run or charity care homes, which is worsening the care crisis.
    • Local authorities pay up to 60% more for same care in council-run homes while refusing to cover the costs of elderly residents in private or charity-run care homes.
    • Figures show local authorities paying only around £450 a week to independent homes, but over £700 a week for the same care in local council-run care homes.
    • CQC seems to be failing in its duty to ensure council commissioning standards are fair.
    • As councils fail to cover the full economic costs of care, independent operators cut costs, driving down staff pay, increasing staff turnover and impacting care quality.
    • Independent care homes also have to overcharge private payers to make up council funding shortfalls.
    • Underfunding social care amounts to a punitive tax on frail, elderly citizen.  

    Shocking figures from Care England Freedom of Information requests show that Councils pay far more to care homes run by local authorities than those run by private firms or charities for the same elderly care services. This is worsening the crisis in the social care sector.

    Laing & Buisson research estimates the cost per resident of an economically run residential home is between £623 and £726 a week, depending on the standard of accommodation and severity of frailty. However, the local authority commissioners seem to be paying private sector or charity care homes under £500 a week for standard older person’s residential care.  Care England reports that at least 31 local authorities in England pay rates below £500 a week, the majority of these are in the North. However those local authorities are paying £650-£750 a week to council-run care homes in the same area.

    The Care Quality Commission (CQC) is supposed to regulate the commissioning of care and ensure local authority commissioning groups act fairly. The Regulator seems to have failed in its duty.

    Paying just £450 to £500 a week for care that costs far more to deliver, means charity or privately-run homes lose money on each council-funded resident. They have to cut costs and potentially reduce quality of care. Many operators impose surcharges on elderly residents who do not qualify for council funding and have to pay for their own care by using their savings or selling the family home. Meanwhile, increasing numbers of private homes are becoming unprofitable, some are closing and the largest companies are at risk of insolvency.

    The crisis in the social care sector is worsening, as increasing numbers of older people in our aging population pile more pressure on council budgets. The Government has consistently promised significant reform, but no action has been taken. This failure of social policy is adding to the problems faced by the National Health Service, as more older people end up in hospital because they did not receive timely or adequate social care.

    The Table below summarises the findings of the Freedom of Information Request responses received by Care England so far.


    Region Local Authority-run care home fees paid by Council Commissioners Private/charity-run care home fees paid by Council Commissioners % extra paid to council homes
    Kirklees Metropolitan Council £721.70    
    Leeds City Council £726    
    Rotherham Council

    (27 miles away)

      £456 +59%
    Manchester City Council

    (20 miles away)

      £460 +58%
    Sheffield City Council   £481 +51%
    Lancashire County Council £656.70 £466.55 +41%
    Wigan Council £656.70 <£450 +46%

    Source: Care England Freedom of Information responses


    Care should not be left to cash-strapped councils who cannot afford to cover all the costs. In addition, the CQC should ensure that those in charge of commissioning care are carrying out their duties fairly, rather than discriminating against independent operators.

    As they pay public sector homes the full economic cost, it seems clear that local authority commissioning groups are aware that the true cost of elderly care is much higher than the amounts they pay to independently-run care homes. The cost of supporting publicly funded care increasingly falls on the most elderly and infirm who have some savings or a family home. This system is broken and needs urgent overhaul.

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