19 September 2008
Underfunding by local authorities will create a crisis in care home provision within the next decade, according to research.
A report by the Joseph Rowntree Foundation claimed that councils would need to find an extra £540m a year if care home places in England were to keep pace with rising demand.
The gap between the fees paid by councils and the rates that care homes consider to be reasonable will give independent care providers – the most likely source of increased capacity in the sector – little incentive to expand, the report argued.
Care homes currently run on occupancy rates of 90%. However, the report predicted that the growing number of older people – combined with static or minimal expansion of the sector – will lead to a shortage of places. Report author William Laing told Public Finance: 'If there's no more capacity, then occupancy rates will increase to the point where it becomes difficult to find places locally and where local authority clients might be crowded out by private clients.'
He estimated that there were 418,000 older people in care homes across the UK in 2008, compared with a projected 454,000 by 2018.
'On current trends, the entire capacity would be reached by 2018 if there were no more development,' he said. The findings update previous research from 2002 and 2004 by community care analysts Laing and Buisson, which showed that the number of care home places was falling.
While local authorities are well aware of the crisis, they are unable to remedy the shortfall, Laing added.
'It's both can't and won't,' he said. 'They can't because they're squeezed for cash, and they won't because many local authorities believe they can squeeze prices as much as they want.'
David Rogers, chair of the Local Government Association's community wellbeing board, said: 'Councils have to make tough choices to provide good-quality care, while keeping council tax down. Councils want to provide the services vulnerable people need but are increasingly unable to do so because central government funding has not kept pace with the demands of an ageing population.
'Local authorities are determined to give disabled and older people a fair deal but the social care system is creaking at the seams,' he added.
PFsep2008
