One in four care home beds at risk without funding increase, providers say

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A woman in a wheelchair at a care home. Photograph: Denis Closon/Rex Features

As many as 100,000 care home beds – one in four of the total – in England will be at risk of closure unless the government bails out the social care sector in the chancellor’s autumn statement this month, leading care sector companies have told the Department of Health.

Half of all care homes are losing money because fees paid by local councils for state-funded residents have fallen below break-even levels, the companies say.

There are growing fears that the NHS would be unable to cope with the consequences of a social care meltdown in which elderly and disabled people are unable to find beds in care homes and turn up at hospital A&E departments.

This week members of the Commons health select committee became the latest key figures to support what they called “an emerging consensus across the NHS that any additional money which might be available in the autumn statement should be directed first towards social care”.

Previous warnings of contraction in the care home sector have suggested that perhaps one in 10 beds in England might be at risk. But sector leaders are understood to have told the health department privately that between 50,000 and 100,000 beds are likely to close over the next four years unless council fees rise sharply.

This comes on top of claims by home-care providers, who support almost 900,000 people to live independently in their own homes, that nine in 10 councils are paying less than the minimum needed to sustain their services.

Care providers have repeatedly warned that fees paid by councils are unviable. But evidence of care home closures is building, with those providing nursing care – which plays a particularly important role in easing the pressure on hospitals – emerging as a particular concern.

The Care Quality Commission, the health and care regulator, has reported a fall in the number of registered nursing homes since April last year after five years of growth.

One council, Norfolk, reported to the Commons communities and local government (CLG) select committee last week that seven nursing homes in the county had either closed or been converted to residential care over the past 16 months, taking out 160 nursing beds, or 5% of the county total. The council has had to find other homes for 114 people.

Martin Green, the chief executive of Care England, which represents the bigger care providers, told the committee: “They are the same people who would have been in hospital 15 years ago, surrounded by doctors, nurses, physios, occupational therapists and a range of other medical professions, and yet care homes are now being required to look after them with these very low levels of resources.”

Care homes are finding it increasingly difficult to offer high enough pay to recruit nurses. While some homes are able to afford more because they have self-funding residents who pay higher fees than council rates, those homes that rely on council contracts are facing a losing battle.

Tim Hammond, chief executive of the Four Seasons care home chain, the biggest, told the CLG committee that the average weekly rate paid to his company by councils for a resident requiring nursing and dementia care was £685. The lowest was £557. Yet the independent consultants LaingBuisson had calculated that a rate of £768 was needed.

Four Seasons relies on councils for 75% of its business, with a further 10% of residents funded by the NHS. Only 15% are self-funders.

Green told the committee that Sheffield council was paying as little as £377 a week for standard residential care, equivalent to an hourly rate of £2.24. Coventry council was paying an equivalent hourly rate of £2.72. Such fees were “ridiculously low”, he said.

One sector leader close to the talks with the health department said it seemed that the providers’ message had been understood, but the concern was that the government as a whole still failed to grasp that they were “on the edge of a precipice”.

A spokesperson for the health department said the government “recognised the challenges faced by the sector” and was committed to ensuring “affordable and dignified” care for older people throughout the country. The money to which councils had access for social care was rising significantly, by up to £3.5bn by 2020, the spokesperson said.