Elderly residents face yet more care home closures because of councils' cash squeeze

By Steve Doughty
Elderly residents face another round of care home closures because of a cash squeeze by councils, experts warned yesterday.
Hundreds of homes may be forced out of business because of cuts in the fees paid by councils for their state-subsidised residents.
The threat to thousands of the most vulnerable people comes on top of the anguish caused by the collapse of the Southern Cross group and the risk of 500 of the care homes it operates shutting.

More than half of the 418,000 older people in Britain's 20,000 care homes have their bills paid by local councils because they have no income, savings or property to pay their own way.
But a report by market analysts Laing and Buisson said that seven out of eight councils have this year either reduced or frozen the fees they pay for their subsidised residents. Inflation is continuing to push up care home operators' costs.
Cutbacks in council fees mean the operators may try to make a profit by increasing the fees they charge to the 40 per cent of residents who pay for themselves – often out of the money raised by the sale of their own homes.
Already bills for private payers are between £50 and £100 a week higher than those paid for state-supported residents. The other alternative for squeezed operators is to shut.

The report said the outlook for care home owners was 'bleak'. It found: 'They face yet another tough year thanks to local authorities again failing to match the increasing costs of providing a placement for an elderly resident in the fees which they will pay.
'This has led to concerns that in the wake of the collapse of Southern Cross, more operators could be forced into administration.'
The report found that 140 of the 158 councils that gave figures had this year frozen or cut their fees. Eleven paid increases of 2 or 3 per cent. Only seven put up fees by 3 per cent or more.
The Daily Mail's Dignity for the Elderly campaign has highlighted the difficulties facing those forced to move out of their home because it closes – and the risk to their lives that is often involved.
Councils last cut fees for subsidised care home residents in 2002 and 2003, but the unpopularity of home closures persuaded many to reverse their policy.