Care homes price rise, warning

Charges at private care homes could rise, according to Norfolk experts.

Low-paid staff and better-off residents are subsidising the cost of places for elderly people entitled to council help with fees, according to a Norfolk homes' spokesman, and research published today by UEA academics.

Tim Leadbeater, from Sheringham, chairman of the Norfolk branch of the Nursing Homes Association, says many private care home staff are barely scraping a living because local authorities use their financial clout to buy assisted places at below cost price.

He believes the cross-subsidy is wrong and say charges should rise to reflect the true cost of care.

And a paper published today by the university's ESRC Centre of Competition Policy, says private care homes trying to recoup cash lost through deals with local authorities have to charge higher prices to those who pay for their own care.

Average fees in residential homes range from �500 to �600 per week, with nursing homes charging more, according to Prof Ruth Hancock, co-author of the paper with Prof Morten Hviid.

But latest figures produced by Norfolk County Council (NCC) show that in September the average gross weekly cost to the council of a residential place was about �410 and NCC was paying just under �430 per nursing home place.

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The professors argue that homes either have to charge self-funders more, to bridge the gap - or be forced out of the market.

The 'big losers' will be 'the squeezed middle' group of elderly people who are no longer able, or willing, to pay a higher price and will drop out of the private market, they say.

Mr Leadbeater, who runs Sheringham's Sun Court nursing home, where a typical room costs �630 to �650 per week, believes many staff are also shouldering the financial burden created by local authority deals which he said covered about two thirds of Norfolk's care home beds.

'The people who have been helping to subsidise the cost have also been the workers and the care home proprietors who, in a great many instances, have a very low income. They keep going by their own determination not to go bust,' he said.

Many care staff, especially in low-pay areas like Yarmouth and King's Lynn, earned the minimum wage, or just above.

Prof Hancock said the 'partnership option', one of many being considered by the Dilnot Commission currently looking at financially-sustainable care funding reforms, would see more elderly people entitled to state support with fees. This would further cut the care homes' profit margins and they would be forced to increase charges.

Mr Leadbeater added that the situation was complex and changing rapidly as NCC gave more people personal budgets to choose their own care.

An NCC spokesman said: 'It is our duty to get the best possible value for tax payers' money with all our services. Our priority is to ensure the people who receive our support get a high quality of care that meets their needs, and we work closely with our independent care home partners to make this happen.'