Residential care in crisis says think tank

A report out today says a funding gap of over £1 billion for older people’s residential care by 2020/21 could result in the loss of around 37,000 beds. This is greater in scale than the collapse of Southern Cross in 2011, which affected 31,000 older people.

The report from ResPublica, in partnership with Four Seasons Health Care, HC-One, and GMB, also projects that if all these care home lost beds were to flow through to hospitals, the annual cost to the NHS would total £3 billion.

Providers, the report says, are being faced with an unsustainable combination of declining real terms funding, rising demand for their services, and increasing financial liabilities. Given the perilous state of the industry, there is no private sector provider with the capacity to take in the residents who would be affected by the loss of other providers’ beds.

In a detailed analysis the report authors outline a number of other significant factors in this crisis including:

  • An Ageing Population: Over 65s make up about 18% of the population. This is set to rise to 25% by 2050. Nearly 10% of the population is over 75 years old.
  • Acute Conditions: 70% of the total health and care spend, in England, is on long term conditions meaning 30% of the population accounts for 70% of the spend.
  • Spending Cuts: 90% of local authorities now only provide funding for older people with ‘substantial’ or ‘critical’ needs. The result of this has been that the number of over 65s getting public money for social care has fallen by 27%.

Director of ResPublica, Phillip Blond, said: “When Southern Cross failed the private sector stepped in and cared for those left homeless. Now, however, with the sector losing money for every funded resident there is no provider of last resort. We fear the worst case scenario is the most likely, that these residents will flood our local general hospitals costing £3 billion per year by 2020.

“The National Living Wage must be brought in. It is essential working people are paid a proper wage. At the same time it will damage the residential care sector which is already under extreme pressure and it could collapse as a result.”

Dr Chai Patel, executive chairman HC One, the UK’s third largest care provider, said: “Our care staff do an incredible job day in – day out and deserve the Living Wage, but it must be properly funded. This report shows that unless the Chancellor takes urgent action to address this looming crisis, tens of thousands of older people will lose their homes and be forced into the NHS.

“Southern Cross was a failing company, what we are facing now is a failing system. At a time when the Baby Boom generation is beginning to retire, and look ahead to their long term care needs, there are huge fears that the homes to care for them simply won’t exist. We must protect the homes of vulnerable older people, and our NHS, by ensuring they are properly funded for the future.”

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