In November George Osborne gave Councils the ability to raise additional funds through council tax rises by up to 2% which must be used to exclusively pay for social care from April 2016. He also gave the Better Care fund an additional £1.5bn annually which will also help pay for care as it is used by the NHS and local authorities. Despite this positive funding news it is unfortunately not enough. The sector is faced with pressures from two fronts; increasing staff costs and more importantly the uneconomical nature of the business as local authorities have a monopoly on setting fees that it will pay providers.
The second front involving commissioning fees needs to be addressed as it is clear that the fees paid by local authorities do not seem to provide adequate room to manoeuvre for providers. It is understandable that local authorities are particularly mindful of getting the best bang for their buck but the rate at which care homes are closing will only increase. This past year we have lost 3,000 beds which is the first decline in a decade, this is set against an ever-growing elderly population.
There are almost 500,000 beds in 18,000 care homes in the UK and they operate at almost 90% occupancy. Residents are 41% privately funded; 37% funded by the state; 12% topped up by the state and 10% funded by the NHS.
William Laing, an economist, has stated that we need a regulator of the care industry, especially in relation to setting prices for care homes that are fair to both the local authority and the provider. The situation currently is weighed too much in favour of the local authority, action needs to be taken to redress this balance otherwise the predictions of a crisis will come into fruition.